The European Chamber of Commerce in Taipei (ECCT) and the American Chamber of Commerce in Taipei (AmCham) added their voices yesterday to objections from the local life insurance sector over recommendations by the Tax Reform Committee on investment-linked life insurance policies.
“The tax levy recommendations would be bad for customers and discourage much-needed long-term savings,” the European chamber’s insurance committee said in a press statement.
The ECCT “strongly recommends that the Tax Reform Committee should reconsider its position and maintain current taxation practice,” the statement said, adding that unit-linked insurance makes an important contribution to the retirement needs of the nation’s aging society.
Chris James, chairman of the ECCT’s insurance committee, said the proposal “will possibly have a negative impact for the foreign [insurance] companies, which are currently revisiting their investment plans [in the local market].”
AmCham’s insurance committee said the tax proposals “will impose an extra tax burden on consumers, discourage consumer savings for family protection and retirement, damage the Taiwan insurance industry and is open to legal challenge.”
It urged the government to handle any proposed change to the taxation of insurance products through the legislative process to avoid violating the Income Tax Act (所得稅法), the Insurance Act (保險法) and the Estate and Gift Tax Act (遺產及贈與稅法).
Both chambers said investment-linked products offer customers flexible and cost-effective life insurance and savings as an alternative to the more opaque traditional products. The separate account provided by investment-linked products provides an extra layer of financial security for policyholders, who could otherwise lose their savings to other general creditors if an insurer were to fail, their statements said.
In most markets, unit-linked insurance products that meet defined criteria are still taxed as life insurance and investment proceeds accrued in the investment account are used to fund future insurance protection, which make them an integral part of the life insurance contract, the chambers said.
Local life insurers said yesterday that the committee’s new tax levies were unfair, even though high net worth clients with NT$30 million (US$910,300) or more in total assets were likely to feel the most pain.
Steven Lee (李怡輝), a product manager at Hontai Life Insurance Co (宏泰人壽), said the government should be fair and impose taxes on all capital gains, including those from share and fund investors, instead of singling out the proceeds of investment-linked policies.
Lin Chao-ting (林昭廷), a senior vice president of Cathay Life Insurance Co (國泰人壽), the nation’s largest life insurer, supported the Financial Supervisory Commission’s view that the new tax policy was flawed and would amount to double taxation.
The new policy would hurt sales of such policies, which have plummeted to a total NT$60 billion in premium income in the first half of this year from NT$465 billion in 2007.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to