The Ministry of Finance announced yesterday that it was expanding the duty drawback on a variety of export items in view of the South Korea-Europe free-trade agreement (FTA), an official said yesterday.
The duty drawback, also known as the duty refund, is given on certain imported materials that are used to produce export products. Local manufacturers importing these materials can apply for the tariff and commodity tax refund on a shipment-by-shipment basis when they export products made from these imported materials, the ministry said.
“The expansion will help enhance the competitiveness of local companies’ exports, because exports and imports will always be important for Taiwan’s economic growth,” Minister of Finance Lee Sush-der (李述德) told a media briefing.
The idea of expanding the duty drawback came after concerns that the South Korea-Europe FTA, which took effect in July, and the upcoming FTA between South Korea and the US would hurt the competitiveness of Taiwanese exporters because South Korea is a major competitor.
Firms can currently apply for the duty drawback on 3,155 imported materials, translating into a refund of about NT$2 billion (US$65 million) a year, the ministry’s data showed.
The ministry plans to expand the duty drawback to another 1,200 items with a tariff rate of more than 4.3 percent, which is expected to create a total of NT$435 million in refunds per year, Lee said.
The chemicals, electrical engineering, plastics and textiles sectors would be the largest beneficiaries of the expansion, as more than 800 of the new products are related to these industries, Lee said.
Exporters of other types of products, such as sophisticated machinery, base metals and automobile parts, would also get duty drawback for raw materials on which tariffs are set at above 4.3 percent, Deputy Minister of Finance Chang Sheng-ford (張盛和) said.
The plan was sanctioned by the Cabinet yesterday morning following discussions between the Ministry of Finance, the Ministry of Economic Affairs and the Council of Agriculture.
The materials applicable to the duty drawback total 4,400 items, translating into NT$2.44 billion in tax refunds a year, the finance ministry said in a statement.
However, the Council of Agriculture has not finalized its list of agricultural materials, so the finance ministry could provide the list of 1,210 industrial materials that were put forward by the Ministry of Economic Affairs no sooner than today, Lee said.
“The expansion can take effect once the Ministry of Economic Affairs provides the list,” Chen said.
Manufacturers should apply for the “criteria for the refund of duties and taxes on raw materials” to the Industrial Development Bureau for verification, which each case taking about 10 days.
The Cabinet yesterday also approved a proposal to simplify corporate tax return procedures as part of the government’s efforts to help local producers compete with their South Korean counterparts.
Chang said an electronic tax refund system for exporters is expected to be implemented by June next year, which will shorten the number of days needed to process tax refunds from between 40 and 50 days to 10 days.
Additional reporting by Shih Hsiu-chuan
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique