The Cabinet approved a proposal yesterday to set a flat rate of 10 percent for the inheritance and gift taxes, but industry analysts and academics said the cut was only one of several steps needed if the government hopes to turn Taiwan into a regional financial hub.
Ending months of debate, the Cabinet gave the green light to lower the inheritance and gift tax to 10 percent and raise the exemption level to NT$12 million (US$370,000) and NT$2.2 million from NT$779 million and NT$1.1 million respectively.
But creating a regional finance center will require more tax reforms, deregulation and more professionals able to speak English, analysts said.
Polaris Research Institute (寶華綜合經濟研究院) president Liang Kuo-yuan (梁國源) said taxation was only one of many factors investors take into consideration.
Liang said that the government had yet to complete its industrial policy, which would be crucial to national development.
If the government is serious about creating a regional financial center, Liang said, another concern is that there are not enough local professionals who speak English.
“I’m afraid we don’t have enough bilingual people, like in Hong Kong or Singapore,” Liang said by telephone. “We also don’t have enough people with an international vision.”
Likening language proficiency to infrastructure, Liang said the country would have to reform its education system.
Wang Lee-rong (王儷容), a research fellow at the Chung-Hua Institution for Economic Research (中經院), said the government should press ahead with deregulation to coax back Taiwanese capital abroad and attract foreign investors.
Wang said a sizable number of Taiwanese businesspeople in China had expressed interest in returning as the investment environment in China has become increasingly unfavorable.
“But they hesitate to do so because of the tax system and legal obstacles here,” Wang said by phone.
Wang said that she could not speculate as to how much Taiwanese capital could return from abroad, but said that investors would not even consider the idea unless the government reformed the tax system and deregulated cross-strait trade.
With a more favorable tax system, Wang said domestic and foreign investors might channel more money into the equity and property markets, creating more job opportunities and boosting tax revenues.
Lai Cheng-i (賴正鎰), chairman of the Taichung-based real estate developer Shining Group (鄉林集團), said the inheritance and gift taxes should be scrapped altogether to facilitate the return of nearly US$100 billion in capital distributed around the world.
Lai, whose business has been hit by the global financial crisis, said the government should be bolder in its measures to fix the economy — and ignore criticism along the way.
The construction tycoon said the government should remove legal barriers preventing Chinese nationals from investing in the property market, among other measures.
The government will next consider a proposal to trim corporate income tax from 25 percent to 20 percent or 17 percent and scrap a 10 percent levy on companies’ retained earnings.
GROWING OWINGS: While Luxembourg and China swapped the top three spots, the US continued to be the largest exposure for Taiwan for the 41st consecutive quarter The US remained the largest debtor nation to Taiwan’s banking sector for the 41st consecutive quarter at the end of September, after local banks’ exposure to the US market rose more than 2 percent from three months earlier, the central bank said. Exposure to the US increased to US$198.896 billion, up US$4.026 billion, or 2.07 percent, from US$194.87 billion in the previous quarter, data released by the central bank showed on Friday. Of the increase, about US$1.4 billion came from banks’ investments in securitized products and interbank loans in the US, while another US$2.6 billion stemmed from trust assets, including mutual funds,
Micron Memory Taiwan Co (台灣美光), a subsidiary of US memorychip maker Micron Technology Inc, has been granted a NT$4.7 billion (US$149.5 million) subsidy under the Ministry of Economic Affairs A+ Corporate Innovation and R&D Enhancement program, the ministry said yesterday. The US memorychip maker’s program aims to back the development of high-performance and high-bandwidth memory chips with a total budget of NT$11.75 billion, the ministry said. Aside from the government funding, Micron is to inject the remaining investment of NT$7.06 billion as the company applied to participate the government’s Global Innovation Partnership Program to deepen technology cooperation, a ministry official told the
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s leading advanced chipmaker, officially began volume production of its 2-nanometer chips in the fourth quarter of this year, according to a recent update on the company’s Web site. The low-key announcement confirms that TSMC, the go-to chipmaker for artificial intelligence (AI) hardware providers Nvidia Corp and iPhone maker Apple Inc, met its original roadmap for the next-generation technology. Production is currently centered at Fab 22 in Kaohsiung, utilizing the company’s first-generation nanosheet transistor technology. The new architecture achieves “full-node strides in performance and power consumption,” TSMC said. The company described the 2nm process as
Even as the US is embarked on a bitter rivalry with China over the deployment of artificial intelligence (AI), Chinese technology is quietly making inroads into the US market. Despite considerable geopolitical tensions, Chinese open-source AI models are winning over a growing number of programmers and companies in the US. These are different from the closed generative AI models that have become household names — ChatGPT-maker OpenAI or Google’s Gemini — whose inner workings are fiercely protected. In contrast, “open” models offered by many Chinese rivals, from Alibaba (阿里巴巴) to DeepSeek (深度求索), allow programmers to customize parts of the software to suit their
RSS