LCD monitor firms set to appeal over proposed DVI tax

By Jason Tan  /  STAFF REPORTER

Thu, Jul 27, 2006 - Page 12

The Taipei Computer Association (TCA, 電腦公會) and monitor vendors yesterday said they were appealing against the government's imposition of a 10 percent tax on imported liquid-crystal-display (LCD) monitors which support the DVI (digital video interface) standard.

"This will cause harm to the local panel industry and LCD monitor vendors," Bill Chen (陳煌勛), a TCA official in charge of the appeal, told the Taipei Times yesterday.

"The imposition will hinder development of digital technologies and hurt vendors' already-low profit margins in selling LCD monitors," he said.

Representatives from TCA, monitor firms, the Industrial Development Bureau, the Tax Bureau and legislators gathered on Tuesday to discuss the matter. TCA and vendors will continue their discussions next Monday to try and come up with alternatives, he added.

The Tax Bureau has decided to impose a 10 percent tariff on imported LCD monitors that have a DVI port, reasoning that these monitors could be used to replace LCD televisions and therefore should be taxed as imported audio-visual home appliances.

Compared to monitors that use traditional video graphics array ports to receive analog signals, DVI-based monitors support high-definition television that provide better image resolution.

The EU has proposed similar measures on taxing imported DVI-based LCD monitors, with levies dependent on screen size, but the move has been stalled because of protests from member countries, according to Chen.

Monitor vendors and the TCA are therefore hoping the government will relieve them of the taxation burden.

If the tax cannot be avoided, they hoped the imposition will not be backdated to models imported during the past six months, as it has been, and that the levy could be lowered.

The nation's top-four LCD monitor brands -- ViewSonic International Corp, Chi Mei Corp (奇美實業), Acer Inc and BenQ Corp (明基) -- have all been approached by the authorities about paying the levy. Some started paying it in March and some are due to settle up before a deadline, according to a source from Acer.

"After all, vendors will have to transfer the extra costs to consumers," the source said, adding that some companies have started to increase prices to offset the tax.

DVI-compliant LCD monitors, which cost around 3 percent more than other LCD monitors, were introduced in Taiwan last year.

Around 10 percent to 20 percent of LCD monitors currently being sold in local stores support the DVI interface, with shipments from vendors such as Chi Mei that could reach a high of around 50 percent, the source said.

These products are mostly assembled in China to take advantage of the cheap labor and costs, and therefore will be levied when they are shipped back to Taiwan, the source added.