Sun, Mar 18, 2012 - Page 8 News List

EDITORIAL: Can new task force avoid old pitfalls?

The Ministry of Finance on Thursday announced the full list of 16 members that will form a task force to discuss the most important taxation and finance issues facing the nation.

According to the ministry’s plan, the finance task force — after finalizing its selection of important finance and taxation issues — will be in charge of setting the agenda for more talks on these issues through smaller group meetings. According to the ministry, it is hoped that these meetings will generate feasible measures to help solve national finance and tax woes by September, at the earliest.

The new task force, whose members are composed of six government ministers, eight academics and two social group representatives, has gained public attention — and raised wider suspicion at the same time — mainly because similar reform committees set up in 2001 and in 2008 did not achieve the results that had been expected. The previous reform committees had conducted frank, in-depth and thorough discussions on issues related to the nation’s finance and tax problems, but they failed to move on to the execution stage and did little to stop problems from getting worse.

So how will this new task force differentiate itself from the previous reform committees, and will it be able to avoid repeating past failures? Unsurprisingly, about 57.6 percent of respondents polled in a telephone survey conducted by the Taiwan Thinktank said they had no confidence in the new task force, compared with 24.6 percent who expressed faith in its ability to deal with the nation’s tax woes.

The government has reiterated its desire to tackle the nation’s taxation and finance issues as problems relating to the widening wealth gap and increased government debt get worse. However, what people are particularly concerned about is whether the government has the determination this time around to embark on a comprehensive reform package. Such a package could include a capital gains tax, windfall tax, energy tax and real-estate taxes based on the actual transaction prices, along with a broader fiscal consolidation plan that could help stabilize the debt situations of both the central and local governments, rather than merely offering a few selective policies that aim to mollify public anger in the short term.

Despite an intention to maintain open and transparent communications with the public on the finance and tax matters, the ministry on Thursday did not respond to questions over whether sensitive tax issues, such as a securities income tax and an idle property tax, would be subject to discussion by the task force. The ministry only said that it was open to all relevant topics being raised by the task force, and in the follow-up group meetings.

It would be better if the government could clearly define which areas it wishes to focus on, otherwise the task force could end up being put on the back burner, just like its predecessors.

Furthermore, the materialization of a reform package — if there is one — would most likely require the government to recognize the nation’s problems as structural and would require telling the public that more than tinkering around the edges is needed to resolve the issues.

The ministry said on Thursday that Minister of Finance Christina Liu (劉憶如) would convene the task force, but how would Liu handle thorny issues if other senior ministers do not share her opinions? Given the government’s past failures, the new task force is likely to fail again, especially if Liu’s superiors — President Ma Ying-jeou (馬英九) and Premier Sean Chen (陳冲) — do not appear to be reform-minded or help push them into execution.

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