Ministry to review tax breaks for ASE

POLLUTION?:Lawmakers said the chip packager had received NT$2.96 billion in tax breaks over the past five years and should give the money back to the government

By Helen Ku  /  Staff reporter

Thu, Dec 12, 2013 - Page 13

The Ministry of Economic Affairs yesterday said it would consider recalling tax incentives granted to Advanced Semiconductor Engineering Inc (ASE, 日月光半導體) if the chip packager was found to have intentionally discharged toxic wastewater and caused water pollution.

The ministry’s statement came after Greater Kaohsiung’s Environmental Protection Bureau on Monday fined ASE NT$600,000 (US$20,300) for dumping highly acidic wastewater into the Houjin River (後勁溪).

The bureau has referred the case to the district prosecutors’ office for investigation.

Saying that ASE has received NT$2.96 billion in tax breaks over the past five years, Taiwan Solidarity Union Legislator Hsu Chung-hsin (許忠信) and Democratic Progressive Party Legislator Lin Tai-hua (林岱樺) yesterday demanded that the ministry punish the company by canceling its tax benefits or stop giving the company preferential treatment.

In response, Minister of Economic Affairs Chang Chia-juch (張家祝) said: “There is no rule indicating the government has the power to recall tax incentives or subsidies that have been awarded to any firm just because it breaks the law.”

“However, if ASE was found to have committed wrongdoing in a deliberate manner, the ministry can consider terminating preferential treatment for the company,” he said at a meeting of the legislature’s Economics Committee.

Given the company’s huge investment over the past few years, Chang said ASE should not be condemned because of one-time incident.

“If the government chose to take a radical and irrational attitude to deal with firms over their misconduct, no company would dare to invest in Taiwan,” Chang said.

“The ministry will not be biased and will address the company’s issue according to the law,” he added.

Industrial Development Bureau Director-General Shen Jung-chin (沈榮津) told the meeting that the bureau would review its beneficiary programs and, if necessary, make adjustments within a month.

On Sept. 25, ASE received the government’s approval to invest NT$92.7 billion to build six new plants in Greater Kaohsiung’s Nanzih District (楠梓) and Taoyuan County’s Jhongli (中壢) over the next five years.

Under the ministry’s policy to encourage China-based Taiwanese firms to return and invest back home, ASE will also be able to enjoy preferential treatments such as a 40 percent of quota for foreign workers.

At a meeting of the legislature’s Finance Committee, Chinese Nationalist Party (KMT) Legislator Lu Shiow-yen (盧秀燕) filed a motion asking the authorities to claim compensation from ASE.

In the motion, Lu said that the hazardous wastewater ASE discharged into the Houjin River has polluted the land along the river, which the Greater Kaohsiung Government had spent at least NT$3.7 billion to dredge.

The motion was approved by the committee, which will recommend that the Ministry of Finance instruct the relevant authorities to claim compensation from the company.

In related news, Qualcomm yesterday said it has multi-source supply strategy across from wafer foundries to packaging providers, downplaying the potential impact from possible K7 shutdown at ASE.

"I am very confident that we have reliable supply chain and reliable multi-source, that is resilient to any adverse situation," said Crisiano Amon, a vice president of Qualcomm Technologies.

Additional reporting by Lisa Wang and CNA

This story has been updated since it was first published.