Premier Su Tseng-chang (
Business registration statistics from the Department of Commerce show that by the end of January, 128,353 businesses were registered in the south -- Yunlin County, Chiayi, Tainan and Kaohsiung counties and cities and Pingtung County. This is but one-fifth of the 619,905 businesses registered nationwide. Taipei City and County and Taoyuan County boast a total of 340,112 registered businesses, or more than 50 percent of all businesses in the country. The eight southern cities and counties added together still fall far behind Taipei City alone and just barely match the number of businesses registered in Taipei County. It is easy to see that the south is industrially weaker than the north.
The excessive concentration of the nation's economy in one region is not a good thing for national security, social stability and overall competitiveness, and this is also why a shift of the economy southward should be a strategic concern. The Ministry of Finance, however, is cautious about offering further incentives to convince businesses to invest in the south. It relies on the Statute for Upgrading Industries (促進產業升級條例) which sets the regulations for preferential treatment in proportion to the amount invested in deprived areas, and this is not enough.
In order to promote even industrial development of areas, Article 7 in the Statute for Upgrading Industries stipulates that business investments in areas lacking resources or areas where development in certain business sectors is slow by certain companies investing a certain amount or hiring a certain number of workers should qualify for corresponding tax exemptions of up to 20 percent of business income taxes for five consecutive years beginning in the year the investment is made.
However, according to the regulations governing tax exemption for businesses investing in townships lacking resources or where development is slow, "townships lacking resources" are restricted to Kinmen, Lienchiang, and Penghu counties, Lanyu (蘭嶼) and Lutao (綠島) townships in Taitung County, and Liuchiu Township (琉球) in Pingtung County, and "townships ... where development is slow" are restricted to a few county townships while excluding urban townships.
"Townships lacking resources or where development is slow" will thus not have much of an impact on the macroeconomic policy to promote economic investment in southern Taiwan, and it will not allow southern counties and cities to form an organically developing unit.
In addition to the need to strengthen tax incentives, the provision of non-business wealth such as land planning, public construction and road quality projects also has a major impact on the willingness of businesses to invest. To ensure the policy to promote economic investment in southern Taiwan does not become a lame duck, the government also has a responsibility to help local governments in southern Taiwan expand and complete such projects.
Chiu Li-li is a Tainan City councilor.
Translated by Perry Svensson
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