The weeks-long legislative impasse continued yesterday as lawmakers again failed to reach a consensus on whether to grant businesses tax breaks for specific categories or to lower the general business income tax.
Legislative Speaker Wang Jin-pyng (王金平), who convened a cross-party negotiation session yesterday morning, told reporters that the pan-blue and pan-green camps still could not find common ground on a draft act promoting innovative industries.
Minister of Finance Lee Sush-der (李述德) expressed reservations during the session about the Democratic Progressive Party’s (DPP) proposal to lower business income tax from 20 percent to 17.5 percent, adding that the state coffers could lose NT$40.3 billion (US$1.2 billion) in annual tax revenue as a result, Wang said.
PHOTO: LO PEI-DER, TAIPEI TIMES
The minister said the government has lost NT$80.8 billion in revenue since the business income tax rate was lowered from 25 percent to 20 percent last year, Wang said.
Lee added that lowering the rate and allowing the rate to apply to all businesses instead of granting companies tax breaks in terms of nurturing talent or innovation did not live up to the spirit of the draft act of facilitating industrial development, Wang said.
However, the DPP still questioned whether small and medium-sized companies would be able to benefit from the tax breaks proposed by the Executive Yuan, he said.
Lawmakers are scheduled to hold another round of negotiations this afternoon.
The gridlock has meant all other bills have been stalled for several weeks as legislators across party lines agreed to give priority to the bill in the current session.
The bill is meant to be an extension of the Act for Industrial Upgrading (促進產業升級條例), which expired at the end of last year, and aims to encourage businesses to invest in innovation, research and development.
Earlier yesterday, Chinese Nationalist Party (KMT) caucus deputy secretary-general Huang Chih-hsiung (黃志雄) said the caucus would be open to any suggested business income tax rate cut.
DPP caucus Policy Research Committee head Ker Chien-ming (柯建銘) said his caucus supported deliberating the draft act rationally.
Meanwhile, Wang defended media criticism that the legislature was left idling all day long due to yesterday’s failed negotiations, saying that “discussing bills rationally helps improve the quality of legislation.”
Wang said the legislature could always hold extra sessions to deal with other bills if necessary.
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