Fri, Oct 03, 2008 - Page 3 News List

Executive Yuan to make final call on sovereign fund


The Presidential Office yesterday said it would have the Executive Yuan decide how much to cut inheritance and gift taxes, adding that it would respect the Executive Yuan’s decision on the establishment of a sovereign wealth fund.

Presidential Office Spokesman Wang Yu-chi (王郁琦) said yesterday the economic advisory task force would respect the Executive Yuan’s decision on how to form the sovereign wealth fund and other technical issues.

“Whether it wants to transform the national development fund into a sovereign fund or to raise the fund separately, the task force will leave it to the Executive Yuan,” Wang said.

Although Wang said that the task force is not a decision-making body, he said it leaned toward the fund.

Wang made the statement after government officials made inconsistent remarks about sovereign funds following Wang’s announcement on Tuesday that the Presidential Office was studying the possibility of creating one.

Council for Economic Planning and Development Vice Chairman San Gee (單驥) said on Wednesday that it was not the government’s priority to create a fund, as such funds are intended for investment abroad, whereas the government needed money to finance public works at home.

The central bank later issued a statement denying reports that it supported the idea of using interest from the nation’s foreign reserves to set up a sovereign wealth fund.

Central bank Governor Perng Fai-nan (彭淮南) said he made no mention of using foreign exchange interest during Tuesday’s task force meeting.

Task force members did not mention foreign exchange interest during the meeting, Wang said, nor did Perng mention the issue or oppose the establishment of a sovereign wealth fund.

The issue came about because some thought it might be worthwhile to discuss the feasibility of creating such a fund, given the country’s substantial foreign reserves, he said.

Wang dismissed media reports that the Presidential Office is at odds with the Executive Yuan on the matter.

“We are on the same page,” he said.

Regarding the reduction of the inheritance and gift taxes, Wang said the task force agreed it was necessary to lower the two taxes and that they leaned toward reducing them to 10 percent.

“However, the task force will not recommend a specific percentage so that the tax reform committee can talk about it before a recommendation is made to the Executive Yuan,” he said.

Also See: Wealth fund debate continues

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