Minister of Economic Affairs Shih Yen-shiang (施顏祥) said yesterday that the ministry was mulling relaxing the threshold of a duty drawback for export products in a bid to reduce production costs for exporters.
The ministry was now studying the feasibility of relaxing the threshold, with the Ministry of Finance looking to enhance exporters’ competitiveness in international markets, Shih said.
He said that whether the final decision was to lower the threshold, or lift the threshold altogether, would be subject to further discussions as there are cost issues involved. Duty drawbacks for export products were introduced 30 years ago, but were suspended years later until last year, when they were reintroduced to apply to goods with customs duty rates above 4.3 percent totaling more than 1,200 items, Shih said.
“What people are concerned about is whether to lower the 4.3 percent threshold or to lift the threshold altogether to benefit all exported goods,” Shih said. “But what we can be sure of is that relaxing the measures will have an immediate benefit for exporters, and the scope of industries to receive the benefit will be expanded.”
The recent data showed the nation’s industrial output declined for four consecutive months before last month, while the nation’s export orders have also dropped four months in a row since February.
Last week, Academia Sinica slashed its GDP growth forecast to 1.94 percent for this year from the 3.81 percent it estimated six months ago.
Meanwhile, Minister of Finance (MOF) Chang Sheng-ford (張盛和) said yesterday that the ministry would fully support the Ministry of Economic Affairs’ (MOEA) conclusions on whether to expand the duty drawback.
“[There is] no problem [for this],” Chang said.
The MOF has been suggesting expanding the duty drawback for years, but the MOEA was previously concerned about losing revenue, Chang said.
Following the MOEA re-launching the discussion, the MOF’s department of customs administration will discuss expanding the drawback with other related government agencies, he said.
The MOF has advocated expanding the drawback for several years, with the scope of its proposed recision changing several times.
In October last year, the MOF expanded the duty drawback to 1,200 items with a tariff rate of more than 4.3 percent, resulting in a total of NT$435 million (US$14.4 million) in refunds per year.
Before last year’s expansion, firms applied for the duty drawback on 3,155 imported materials, the ministry’s data showed.