Economic meeting stifles China angle

Minister of Finance Ho Chih-chin (何志欽) said earlier that his ministry could allow companies to reserve their undistributed surplus earnings for a maximum of two years, from the current one year, before a 10 percent business income tax is levied.

But at the same time, the ministry plans to make the tax incentives for automated equipment investments only applicable to key investment projects and small and medium-sized enterprises (SMEs) to avoid tax abuses, he said.

The finance ministry also urged revoking or restricting the five-year tax-exempt treatment granted to emerging, strategic industries. The economic affairs ministry has planned to slash two-thirds of the 305 tax-free items in exchange for the finance ministry's support, according to an Economic Daily News report yesterday.

The limited application is expected to affect semiconductor and flat-panel sectors.

Conference delegates are also expected to discuss the management of enterprises in which the government owns shares, how to effectively dispose of national assets, the privatization of state-run institutions, and how to boost usage efficiencies of state-owned land.