Growth to dictate timing of energy tax plan: Chang

MATTER OF TIMING::The government delayed the launch of an energy tax plan this year due to the gloomy economic sentiment, the minister said

By Amy Su  /  Staff reporter

Tue, Dec 18, 2012 - Page 13

The Ministry of Finance will push forward the passage of an energy tax if the nation’s economy grows more than 3.5 percent in the second half of next year, Minister of Finance Chang Sheng-ford (張盛和) said yesterday.

Under the premise, the ministry may start discussing the content of energy tax between the end of next year and early 2014, following the Directorate-General of Budget, Accounting and Statistics’ (DGBAS) forecast of 3.51 percent year-on-year growth in GDP for the second half of next year.

“The tax will be more acceptable to the public if the economy rebounds and average income grows,” the minister said in a legislative question-and-answer session.

The passage of the energy tax is seen as an important move for President Ma Ying-jeou’s (馬英九) second term, in line with his vision of saving energy and cutting carbon emissions.

However, the gloomy economic sentiment this year forced the government to delay the launch of the tax, given that policy changes and reforms are expected to result in a backlash from the public.

Chang said the ministry reported to the Cabinet last month that it would onto the energy tax draft this year.

DISCUSSION

However, the ministry may be able to launch discussions on the tax by the end of next year at the soonest on the back of an expected economic recovery, Chang said, in response to various lawmakers’ request to clarify the timing.

Following the ministry’s push to introduce an energy tax, the commodity tax will also be added in the discussion to make both taxes more reasonable and avoid double taxation, Chang said.

Even if the economy does not grow more than 3.5 percent in the second half of next year from the same period this year, the ministry may still hold a symposium to discuss these issues to get more opinions, Chang added.

In related news, the ministry made concessions to various lawmakers during a meeting of the legislature’s Finance Committee over a Cabinet-proposed amendment to the Public Debt Act (公共債務法) to temporarily raise the debt capacity for the nation’s six special municipalities to finance their public constructions.

SUGGESTION

Chang agreed with Chinese Nationalist Party (KMT) Legislator Lu Shiow-yen’s (盧秀燕) suggestion to raise the debt capacity for the six cities to 20 percent of their annual expenditure, from the 15 percent set originally, for no more than five years.

The six cities include Taipei, New Taipei City (新北市), Greater Taichung, Greater Tainan and Greater Kaohsiung, as well as Taoyuan, which is expected to be upgraded to a special municipality in 2014.

The amendment of the act may be reviewed again next week at the soonest, after lawmakers and the ministry failed to reach a consensus on the issue on Thursday last week.