It was a slap in the Taiwanese government’s face when negotiations on a cross-strait mechanism to avoid double taxation broke down at the last minute on Monday.
However, it should be a precious lesson for President Ma Ying-jeou’s (馬英九) administration: Haste makes waste.
The delay is good news for the public and more than 1 million China-based Taiwanese businesspeople, who can now avoid the harmful consequences of a hastily signed pact. Nevertheless, the way the Ma administration handled the talks is worrying and raises more concerns about the planned economic cooperation framework agreement (ECFA).
Citing confidentiality, Minister of Finance Lee Sush-der (李述德) refused to specify what “unexpected technical issues” caused the negotiations to fail, saying only that they were related to tax items, tax rates and the definition of residence.
Aside from the tax rates, some of these “technical issues” are basic terms that should have been addressed in the first few negotiation sessions.
Lee should have known this better than anyone else. Why, then, did the ministry wait until the last minute and allow the “technical issues” to get in the way?
Meanwhile, Straits Exchange Foundation (SEF) Secretary-General Kao Koong-lian (高孔廉) offered the excuse that the two sides had only begun negotiations on double taxation in October, and that the issue remained complicated.
The government has signed bilateral tax exemption agreements with 16 countries since 1981, but the negotiations for each of those took between one and four years to complete, he said.
Again, Kao and Lee should have known this better than anyone else. So why did they believe they could wrap up a tax deal with China in less than three months when officials knew it would be far more complicated than the agreements Taiwan has signed with 16 other countries?
What’s the hurry?
None of these questions will be answered since Lee made it clear that “he cannot reveal too much information” because the two governments are still in the process of negotiating.
This raises another question: Why the secrecy?
This secrecy is not in line with how Taiwan has handled previous tax proposals.
In the past, Taiwan included the private sector in the policymaking process by creating a tax reform committee, whose authority often transcended that of the finance ministry.
The committee reviewed many versions of tax rate proposals and the media accordingly informed the public. The proposals were thoroughly discussed before the committee and the government sought a consensus. After all, a balance must be struck between the government and the taxpayer.
This time around, however, the finance ministry is keeping the public in the dark, trying to single-handedly pull off a deal with China.
This will only end up triggering more opposition, not only to a taxation agreement with China, but also to other agreements such as an ECFA.
Taiwan’s domestic political situation is following recognizable political rhythms, while the international environment surrounding Taiwan is undergoing a major transformation. Within Taiwan, there are ongoing battles between the legislative and executive branches over the budget, and between cities and the central government over resources. Tensions between political parties dominate headlines and consume much of the attention of party leaders. Jockeying is underway for local elections this November and national elections in 2028. And the longstanding philosophical debate inside Taiwan over how best to protect Taiwan and promote the good life remains unresolved. Amidst all of this, Taiwan continues to function well. It
In an article published on Tuesday in The Atlantic, titled “Will Taiwan Just Give Up?”, journalist Simon Shuster emphasizes the unpredictability of the US as an ally under US President Donald Trump and cites diminishing faith in the US as a contributor to what he sees as waning determination to resist China. As the title suggests, Shuster views a deal between Taiwan and China as an increasingly inevitable alternative to a costly war — one that Taiwan, lacking reliable allies and military capabilities, would eventually be destined to lose. He focuses on Chinese Nationalist Party (KMT) Chairwoman Cheng Li-wun (鄭麗文) — her
With candidate registration for this year’s local elections closed on Sept. 4 and the elections less than 80 days away, Democratic Progressive Party (DPP) Legislator and Taipei mayoral candidate Puma Shen’s (沈伯洋) rapidly growing popularity has become the focus of political talk shows and online discussions over the past week, heating up the mayoral election race in Taipei. Local media headlines and political pundits have picked up his supporters’ slogan “ocean current” (洋流) — a play on the last character of Shen’s name, which literally means “ocean” (洋), and the character (流), which can mean “current,” “flow” or “trend” — to
When was the last time you heard a meaningful proposal to prevent Iran from developing a nuclear arsenal? There has been nothing on the subject since the June Memorandum of Understanding between the US and Iran; the promised 60 days of talks to settle questions around Tehran’s uranium-enrichment program never began and have long since expired. When the war was launched, on Feb. 28, a resolution of the nuclear dispute was prominent among the dizzying array of US and Israeli aims to explain the attack. But as should be clear by now, the attempt was entirely reliant on achieving regime change. That
RSS