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Cross-strait tax relief proposal triggers stalemate

Democratic Progressive Party lawmakers occupy the podium in the legislature in Taipei yesterday to block voting on a proposal that would prevent Taiwanese businesspeople and companies from being double-taxed on income earned in China. PHOTO: FANG PIN-CHAO, TAIPEI TIMES

The Democratic Progressive Party (DPP) said yesterday it opposed a proposal to allow Taiwanese businesses or individuals based in China to avoid paying taxes in Taiwan on income earned in China.

The legislature was scheduled to review an amendment to Article 25 of the Act Governing the Relations Between the Peoples of the Taiwan Area and the Mainland Area (兩岸人民關係條例) yesterday that would give the Executive Yuan the right to issue orders on cross-strait business taxation.

The KMT wants the bill passed to eliminate dual taxation on the cross-strait shipping sector.

But the session was deadlocked over the issue yesterday morning after legislators failed to reach a consensus on the amendment. DPP legislators occupied the speaker’s podium in a bid to prevent the KMT from calling a vote on the bill.

DPP caucus whip Ker Chien-ming (柯建銘) threatened to “fight to the death” to block the bill.

At a press conference later in the day, KMT caucus whip Lin Yi-shih (林益世) criticized the DPP for paralyzing the plenary session: “We were supposed to deal with a number of bills today ... all bills should have been dealt with by democratic principles.”

Lin said the KMT might convene extraordinary sessions this summer to pass more bills.

“KMT legislators are more than happy to sacrifice our personal time if the legislature is unable to pass bills aimed at improving people’s livelihoods,” Lin said.

DPP spokesman Cheng Wen-tsang (鄭文燦) said the government wanted to ensure that Taiwanese and Chinese businesses were not taxed in both Taiwan and China, but it was going about it the wrong way. The government should amend the Business Tax Act (營業稅法) and the Income Tax Act (所得稅法), not the Act Governing the Relations Between the Peoples of the Taiwan Area and the Mainland Area, to give the Executive Yuan the right to issue orders on cross-strait tax, Cheng said.

He said the Constitution stipulates that changes to tax laws have to be regulated by law, and it would be unconstitutional if the government changed tax rules through administrative orders.

Cheng said Taipei and Beijing inked an agreement in April promising that Chinese and Taiwanese shipping companies would not be subject to dual taxation. The government wanted to expand the shipping pact to cover all businesses and was doing so in an underhanded manner, he said.

The government should not deprive the legislature of the right to approve laws by expanding its use of administrative orders, he said.

Meanwhile, DPP Legislator Chang Hwa-kuan (張花冠) accused the government of preparing to allow Chinese capital to be invested in Budai Harbor (布袋港), Chiayi County.

Association for Relations Across the Taiwan Strait Deputy Chairman Zheng Lizhong (鄭立中) visited the harbor with KMT Legislator Wong Chung-chun (翁重鈞), who represents Chiayi County. Chang said they discussed Chinese capital investment in Budai Harbor.

Cheng Wen-tsang said the party opposed allowing Chinese investment in airports, harbors and other infrastructure that has strategic significance because this would jeopardize national security.

He said Chinese investment in Taiwan’s airports and harbors was politically motivated.
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