The Ministry of Finance (MOF) said yesterday that its custom tariff rate committee might meet again next month to discuss a further reduction in tariff rates for bulk commodities to reflect the rising cost of global raw materials as they start to weigh on local consumer prices.
The ministry made the remarks during a meeting of the legislature’s Finance Committee after Chinese Nationalist Party (KMT) Legislator Lai Shyh-bao (賴士葆) criticized the ministry’s downward adjustment of custom tariff rates on Wednesday for failing to meet public expectations.
“We do not rule out calling a meeting again next month, and we will continue to watch commodity price fluctuations closely,” Deputy Minister of Finance Chang Sheng-ford (張盛和) told the committee.
The ministry’s Department of Customs Administration announced on Wednesday that the custom tariff rates for corn -powder, soybean flour, cane sugar and refined sugar would be cut by between 25 percent and 50 percent.
The rate adjustments will take effect as soon as next week, pending approval from the Cabinet, ministry officials said.
The latest tariff cut, however, did not apply to wheat, the price of which has risen 45.1 percent from a year ago as of last month.
The ministry said that although wheat prices had increased over the last few months, the fluctuation was not as great as in 2007 before the global financial crisis, adding that more observation was needed before any adjustments were made to the rate.
“World wheat inventories remain plentiful, which might send the prices down [in the near future].” Chang said. “Moreover, the substitution of wheat for rice is high. This is a professional assessment by the Council of Agriculture.”
Lai said that the ministry’s partial downward adjustments did not take into consideration public feelings as the ministry only reduced the rates for corn powder and soybean flour, which are used to make animal feed, but not for wheat, a grain that is mostly consumed by humans.
“This is called an ‘unfelt downward adjustment.’ Not only has it been estimated that it will cost state coffers more than NT$90 million [US$2.9 million], it has already caused public anger,” Lai said. “The government should look at the matter from a grassroots perspective.”
The ministry has adjusted the custom tariff rates for bulk commodities downward several times since August 2007 when the global financial crisis started to take its toll on the world economy, resulting in a loss of more than NT$3.6 billion in tax revenues.
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