Tue, Dec 24, 2013 - Page 8 News List

Social responsibility as incentive

By Chan Shun-kuei 詹順貴

Business owners have enjoyed various tax advantages, awards and subsidies, as well as long-term concessionary prices for water and electricity. These benefits were originally enabled by laws such as the Statute for Prizes, Awards and Investments (獎勵投資條例) and the Statute for Upgrading Industries (促進產業升級條例), which have since expired and been replaced by the 2010 Act for Industrial Innovation (產業創新條例). Several successive legal amendments have also been made to lower corporate taxes. Although property dealers now have to register their transactions based on the actual transaction price, it remains to be seen whether the government will start taxing property deals according to their real selling price next year as planned. What is certain is that the special tax on select goods and services, known as the luxury tax, which the government introduced in June 2011, supposedly to curb runaway speculation, has been completely ineffective.

The national zoning plan announced by the Ministry of the Interior in October shows that all of the nation’s urban planning zones added together could accommodate nearly 40 million people. There are 1.56 million empty housing units in the nation, including 329,000 vacant properties in New Taipei City (新北市) alone. The six major cities have 1.11 million empty units in total. The putative figure of 40 million people stands in stark contrast to those that appear in the population projections published by the Council for Economic Planning and Development. Taiwan’s current population is about 23.26 million and the population growth rate has been falling for years. The council’s population projections include high, medium and low variants. According to the medium variant, the total population would reach a peak of 23.656 million in 2024, after which it would start to fall. It is obvious that the population figure reflected by Taiwan’s urban plans will never be reached.

The problem is that the nation’s plutocratic style of government has long since turned land into a commodity. Politicians see reclassification and development of farmland as a way to improve local government finances and to influence local factions. That explains why, despite industrial zones all over the nation sitting idle, urban development plans are still moving forward in an unbridled manner. It also explains why 15,000 hectares of land, most of which is classified as special agricultural zones, is in the process of being reclassified for development, after which owners can be forced to sell.

Deputy Minister of the Interior Hsiao Chia-chi (蕭家淇) was formerly deputy mayor of Taichung. On Dec. 5, 2010, shortly before the city was combined with Taichung County to form Greater Taichung, Hsiao was interviewed by the Chinese-language United Daily News. He smugly informed the interviewer that Taichung City had the healthiest finances among the five big cities. He said that one of the main sources of the city’s finances was reclassification and expropriation of land, transforming tax-free agricultural land into land designated for construction and development. In addition to making some of the land available for auction, the city could also increase its income from the land value tax, the land value increment tax and the house tax. Hsiao’s comments make clear the real motivation for land reclassification and expropriation.

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