The government is determined to help local enterprises improve their bottom lines, Minister of Economic Affairs Chang Chia-juch (張家祝) said on Saturday.
Chang made the remark after the Legislative Yuan approved an amendment to the Act For Development of Small and Medium-sized Enterprises (中小企業發展條例) last week that local companies are expected to receive higher tax deductions resulting from their expenditure in research and development.
The revised law also gives tax incentives to employers who hire more employees.
Chang said that with the market growing more upbeat in regard to the local economy, the government will come up with more measures to push for law revisions to allow enterprises to generate more profit.
The Directorate-General of Budget, Accounting and Statistics on Friday upgraded its forecast of the nation’s GDP growth for this year from 2.82 percent to 2.98 percent, citing stronger private consumption and investment.
In contrast, the Chung-Hua Institution for Economic Research (中華經濟研究院) said the government estimate remains conservative, saying that the local economy could grow 3.03 percent this year because of relatively strong consumption and investment.
Data from the Financial Supervisory Commission shows that in the first quarter of this year, companies listed on the main board and on the over-the-counter market generated NT$6.5 trillion (US$215 billion) in sales, up 4.4 percent from a year earlier, while their net profit grew 9.8 percent to NT$379.5 billion.
Chang said that as long as companies become more profitable, it is more likely they will raise wages for their employees.
In March, the ministry met with representatives from 22 major local companies and asked them whether they planned to give raises to their employees.
According to the ministry, all 22 firms, including Formosa Plastics Corp (台塑), Nan Ya Plastics Corp (南亞塑膠), Advanced Semiconductor Engineering Inc (日月光半導體) and Kenda Rubber Industrial Co (建大輪胎), have promised to raise wages by 3 to 5 percent, effective from the first half of the year.