Fri, Oct 31, 2008 - Page 2 News List

Cabinet approves measure to double tobacco surcharge

INVESTMENT LURE The Cabinet also approved an amendment granting five-year income tax exemptions to encourage companies to invest

By Shih Hsiu-Chuan  /  STAFF REPORTER

The Cabinet yesterday approved an amendment seeking to double the tobacco health and welfare surcharge in a bid to control tobacco consumption.

The government suggested raising the surcharge imposed on tobacco products to NT$20 per package from the current NT$10 per package, Cabinet Spokeswoman Vanessa Shih (史亞平) told a press conference after the weekly meeting.

The proposed amendment to the Tobacco Hazard Prevention Act (菸害防制法) states that the 48.7 percent surcharge imposed on the retail price of tobacco products sold in Taiwan is lower than the international standards of 66.7 percent to 80 percent set by the World Bank.

Department of Health statistics shows that annual expenditure on tobacco-related diseases has reached approximately NT$45 billion (US$1.37 billion), accounting for about one-tenth of the National Health Insurance System's expenses.

Shih said the government would use the surcharge collected from tobacco sales to subsidize the health insurance premiums of economically disadvantaged families living in remote areas or those suffering from rare diseases.

The government is expected to adopt the new surcharge on Jan. 11 if the legislature approves the amendment.

The Cabinet also approved an amendment to the Statute for Upgrading Industries (促進產業升級條例) designed to encourage investment yesterday.

The amendment proposes granting five-year income tax exemptions to manufacturing or service companies that put in new investments between July 1 this year and the end of next year.

The Ministry of Economic Affairs has estimated that this would create NT$500 billion in new investments, which in turn would contribute to an increase of NT$6 billion in tax revenue over five years.

The Cabinet also approved a draft measure to turn Taiwan Taoyuan International Airport into an Asian logistics center that could help transform domestic industries and boost long-term economic development.

Minister of Transportation and Communications Mao Chi-kuo (毛治國) said at a press conference after the Cabinet meeting that the government planned to set up a state-owned enterprise to manage the transformation of the airport into a regional center.

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