Thu, May 17, 2012 - Page 11 News List

Manufacturers milking tariff cuts, lawmakers say

By Amy Su  /  Staff reporter

A group of lawmakers yesterday passed a proposal requesting that the Ministry of Finance withdraw tariff cuts on milk powder products, saying that over the past six months manufacturers had failed to translate the cost reductions into lower prices for consumers.

In the meantime, the lawmakers requested that the ministry strengthen tax inspections on milk powder manufacturers to find out if these companies had actually pocketed the gains from lower tariffs.

The lawmakers’ proposal comes after an announcement made last week by the ministry’s customs tariff committee that it would extend by another six months tariff reductions on seven imported products — including infant milk powder, formula milk powder and other powered milk products.

The ministry first introduced the tariff cuts, following a proposal passed by several lawmakers, in November last year, with an extension set for May 24. However, politicians changed their minds and are now taking action to halt the plans.

“These milk powder manufacturers have acted against their consciences,” Chinese Nationalist Party (KMT) Legislator Lu Shiow-yen (盧秀燕), previously a key supporter of the tariff cuts, said during a question-and-answer session at the legislature.

As milk manufacturers enjoyed a six-month tariff cut, but failed to lower retail prices, “the ministry should not extend the tariff cuts on these products,” she said.

Minister of Finance Christina Liu (劉憶如), attending the same question-and-answer session, said she would look into the matter and provide answers within a month.

The ministry said in a statement later yesterday that it would follow the lawmakers’ request, adding that the customs tariff committee would hold a meeting soon to halt the tariff reduction.

In addition, the ministry said the committee would review whether to extend the tariff cuts on four other products — butter, anhydrous milk fat, corn powder and soybean flour — which it had approved last week.

In December last year, the Fair Trade Commission said it had put the issue of milk powder pricing on file for investigation and would continue to watch to determine if prices were illegally fixed.

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