Alliance for a Fair Tax Reform (AFTR) and the Taiwan Alliance for Farming Villages yesterday lashed out at President Ma Ying-jeou (馬英九) and the draft industrial innovation act (產業創新條例) — which is likely to be passed by the legislature today.
“President Ma, you’re making a mistake, you’re really making a mistake trying to tell the legislature to pass the bill,” AFTR convener Wang Jung-chang (王榮璋) told a news conference at the legislature. “Deducting taxes [for businesses] would not help to reduce employment, nor would it save the economy.”
“Instead, the bill would only bring an enlarged gap between the rich and the poor, social injustice and a deteriorating financial condition for the country — and you will be remembered in history as the president who brought about disaster upon the country,” Wang said.
The draft industrial innovation act — which aims to provide more tax breaks for business and to facilitate expropriation of land for constructing industrial parks — were likely to be passed today, with the governing Chinese Nationalist Party (KMT) holding a vast majority in the Legislative Yuan.
Wang said that if the bill were passed today, there would be an immediate loss of NT$55.4 billion (US$1.7 billion) in tax income for the national treasury next year.
“The government says that by giving tax breaks to businesses, they expect to attract more investments that would bring in more than NT$148.3 billion [US$4.7 billion] in tax income,” he said. “But the loss is immediate, and the income is only ‘expected.’”
AFTR spokesman Chien Hsi-chieh said that Taiwan already has a very low tax rate for businesses, and should not go any lower.
“If the government wants to encourage business more, it could provide low-interest mortgages rather than tax breaks,” Chien said. “Taiwan has been giving tax breaks of different degrees to businesses for the past 20 years, but businesses are still complaining and threatening to move out. However, China never gave any tax breaks to businesses and collects more taxes than Taiwan.”
He said the comparison shows that tax breaks are not an effective way to attract investment.
Thomas Chan (詹順貴), a representative of the Taiwan Alliance for Farming Villages, expressed his concern over clauses in the draft bill about expropriating farmlands.
“Does the US government expropriate lands for Intel or Google to build their plants or headquarters? No,” he said. “So how come large corporations can always turn to the government when they need land here?”
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