The Chinese National Federation of Industries yesterday called on the government to revise labor and taxation rules to make Taiwan more business friendly, as the overall operating environment has deteriorated over the past year.
“The nation should spend less time on politicking and assign more importance to economic issues, as the economy has stagnated in the past decade after two administration changes,” federation chairman Rock Hsu (許勝雄) said upon the release of its annual position paper.
The trade group, which consists of 155 member associations and represents a majority of local manufacturing businesses, voiced misgivings over a lack of electricity, water, land, labor and talent supply, as the government has given priority to wealth redistribution and environmental protection, Hsu said.
Hsu, also the chairman of notebook computer maker Compal Electronics Co (仁寶), said he is particularly tired of labor rules introduced earlier this year that shortened work hours, and raised overtime and holiday pay without flexibility.
As a result of the new labor rules, many firms have begun keeping tight payrolls and hiring more temporary workers during the high season, he said.
Small businesses close on weekends and holidays to save on labor costs, he added.
The practice denies workers the opportunity to work overtime, even though many would prefer to do so at lower compensation, Hsu said.
“What the industry wants is clear and simple — a labor law that would take seasonality into consideration and provide flexibility for different sectors,” Hsu said.
It is inappropriate and inadequate for the Council of Labor Affairs to seek to resolve the controversy by applying different orders and interpretations to different sectors, he added.
The government should make a bold move and change the law, as it is unpopular and unfavorable for corporate competition, Hsu said.
The trade group also called for a taxation system that would treat residents and foreigners fairly.
Tax rates for stock dividend income are 20 percent for foreign investors, but range from 5 percent to 45 percent for Taiwanese, giving them motivation to try to evade taxation, Hsu said.
The Ministry of Finance has been contemplating tax revisions, but has been unable to come up with a bill, reportedly over fears that a tax cut might be read as sympathizing with rich people.
The federation said the government needs to demonstrate prowess if it is serious about restructuring the economy.
Policymakers should set the GDP growth target at 3 percent and mobilize all government agencies and resources toward achieving that goal, the federation said, adding that the government lacks competence, society lacks order, the nation needs direction, the legislature must be dutiful and the young generation is short on hope.
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