Mon, Oct 12, 2009 - Page 12 News List

Tax Reform Committee to reconvene

REVISIONS SOUGHTThe committee has not met since the Cabinet was reshuffled. Big business was not happy with its proposed ‘green tax’ and wants changes made

By Crystal Hsu  /  STAFF REPORTER

The government is expected to reconvene the Tax Reform Committee this month and adopt a milder approach to dealing with proposed energy and environment taxes to facilitate the reform, Ministry of Finance officials said yesterday.

Minister of Finance Lee Sush-der (李述德) said the ministry was willing to make major concessions to remove resistance when the committee next meets.

The panel, put in charge of overhauling the nation’s taxes and due to complete their work at the end of the year, has not met since the Cabinet was reshuffled last month.

The committee was instructed on Aug. 3 to explore non-tax measures to encourage energy conservation and cut greenhouse gas emissions after its original plan riled the business community.

“The ministry is committed to the green tax reform,” Lee said by telephone.

“All [sides] agree on the need to reform, but differ on the tax rates. We’re willing to make concessions as long as they do not sabotage the goal,” Lee said.

The task force has proposed imposing incremental energy and environment taxes to reduce carbon emissions by 8.9 million tonnes over the next decade.

Daigee Shaw (蕭代基), president of the Chung-Hua Institution for Economic Research, which was commissioned to conduct the research, has called for a NT$9.55 energy tax and a NT$0.45 environment tax for each liter of gasoline consumed in the first year.

The taxes will then go up each year until they reach NT$24.12 and NT$4.53 respectively in the 10th year, similar levels to Japan and South Korea, and boost the state coffers by more than NT$800 billion (US$24.8 billion).

Local media reported last week that the government intends to halve the rates and use the extra revenues to subsidize low-income families and fund other tax cuts.

Lee declined to confirm the figures, saying premature revelations of the bottom line would weaken his bargaining chips.

Shaw, who arrived at the original rates by pricing NT$2,000 for each tonne of carbon emissions, said a cut of less than 50 percent was acceptable.

To defuse resistance, the committee reportedly would exempt energy exports from the environment levy.

Local media said the compromise was aimed at reducing the impact of the reform on the petrochemical industry.

Preston Chen (陳武雄), chairman of the Chinese National Federation of Industries (工業總會), has warned the green tax — as it stands now — could hurt industries and economic growth.

Deputy Minister of Finance Chang Sheng-ford (張盛和) said the committee has yet to decide when to meet because Vice Premier Eric Chu (朱立倫) has the final say.

“The ministry will convene the meetings at the vice premier’s convenience when submitting the proposal,” Chang said by telephone.

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