Wed, Oct 24, 2012 - Page 3 News List

Government faces criticism on fees for industrial property

By Chen Ching-min and Jason Pan  /  Staff reporter, with staff writer

Echoing the grievances of a number of businesses, lawmakers yesterday called on President Ma Ying-jeou’s (馬英九) administration to stop burdening small and medium-sized enterprises (SMEs) with high land leasing fees and property transaction charges.

After receiving complaints by several SMEs in industrial zones in central and southern Taiwan, Democratic Progressive Party (DPP) Legislator Lin Tai-hua (林岱樺) from Greater Kaohsiung accused the government of financially “squeezing” businesses.

“The treasury is depleted, so the Ma administration tries to extract money from workers. Is it now turning to extort money from small and medium enterprises?” Lin asked.

DPP Legislator Chen Ting-fei (陳亭妃) from Greater Tainan said that in the past decade, when faced with firms moving to China and Southeast Asian countries, the government had enacted an incentive measure for preferential land leasing rates in industrial zones in an effort to retain businesses.

‘These days, the government is swindling these companies, trying to extract more payment from them. The Industrial Development Bureau [IDB] has been oblivious to the many complaints from the suffering companies,” Chen said.

“Now with this situation and economy in stagnation ... we can see straight through Ma’s National Day address. He spoke about how industries must head toward higher value-added development. His words are nothing but lies and sloganeering,” she added.

The bureau recently sent out notices to more than 900 SMEs in 18 designated industrial parks, informing them that when they change their property lease or enter into a new land transaction, the businesses must now follow the current market valuation and not the price on the original contracts.

It involves the incentive proposition “Measure for Reinforcing the Adjustment of Preferential Rental Fees for Land in Industrial Zones,” also known as the “006688” measure. The proposition came into force on May 1, 2002.

The measure exempts companies from land lease fees during the first two years, seeks payment of 60 percent of full lease fees during the third and fourth years, 80 percent of full lease fees during the fifth and sixth years and the full payment of lease fees in the seventh year. The term limit for land leases is 20 years.

If the company applies to purchase the land before the lease period has expired, the guarantee deposit and lease fees already paid during the lease period may be subtracted from the original price of the contract. In this way the company is effectively exempted from lease fees during the lease period, according to information from the IDB.

DPP Legislator Lin Tai-hua (林岱樺) said that all the companies in the industrial zones had a common understanding that their signed original land contracts had been verified by the judiciary.

“But now the government’s executive branch is abusing their power to ‘play word games’ and ‘imposing their own definition,’ and so this is illegal and breaks binding contracts,” she said.

Lin accused the Ma administration of deceiving the public.

IDB chief secretary Chiu Chiu-hui (邱求慧) said the agency would find a fair and legal solution that is acceptable to all the companies involved.

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