Fri, Sep 25, 2015 - Page 13 News List

Ministry looks to boost spending on R&D, investment

By Lauly Li  /  Staff reporter

In an effort to encourage local businesses to invest more in research and development (R&D) and to boost domestic investment, the Ministry of Economic Affairs yesterday sent a draft amendment to the Statute for Industrial Innovation (產業創新條例) to the Cabinet for deliberation.

“This is the largest amendment to the law since it took effect in 2010,” Industrial Development Bureau Director-General Wu Ming-ji (吳明機) told a press conference.

Wu said the proposed amendment states that all state-owned enterprises would need to include a “certain” amount of R&D investment in their annual budget proposals.

“The spending on R&D would account for at least 1 percent of the state-run company’s annual revenue,” Wu said.

TOO SMALL

He said China Steel Corp’s (CSC, 中鋼) investment in R&D only accounted for 0.54 percent of its sales of NT$366.51 billion (US$11.02 billion) last year.

“The investment in R&D was too little,” he added.

However, Wu said it could be challenging to gain lawmakers’ approval of the bill because the public expects state-run companies to have higher efficiency and better profitability, whereas investment in R&D could dilute their earnings.

COOPERATION

In a bid to improve cooperation between academics and businesses, the ministry is also proposing to allow academics to delay their income tax payments by five years on any gains made from transferring exclusive technologies or patents to companies and then to tax them based on the rate five years prior.

Wu said the proposed amendment also has a clause that gives businesses certain tax incentives if they carry out training sessions for their employees on an annual basis to raise their competitiveness.

As part of efforts to nurture local talent, Wu said the bureau plans to set up an examination center where individuals could undertake training programs and exams to get government-verified certification.

“For example, individuals who are good at writing applications could take the exam and get a certificate for it,” Wu said.

INCENTIVES

Wu said the ministry plans to offer enterprises tax incentives if companies keep increasing their investments or adding workers when the economy is slowing down.

Companies using their overseas earnings to invest in Taiwan would also enjoy tax incentives, Wu said.

As the proposed amendment contains various tax incentives, the ministry would have to discuss the details with the Ministry of Finance during meetings at the Executive Yuan, he said.

“We hope the proposed amendment can get the approval of the Executive Yuan and be sent to the legislature for further deliberation before the end of the year,” Wu said.

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