Minister of Finance Chang Sheng-ford (張盛和) yesterday rebutted the claim that the government’s proposal to create “free economic pilot zones” (FEPZs) would result in an annual loss of up to NT$50 billion (US$1.674 billion) in tax revenue, adding that, on the contrary, it would enlarge tax bases.
Following the disclosure of the proposal on Thursday, the Chinese-language Economic Daily News reported yesterday that a variety of tax incentives would be granted to businesses with operations in pilot zones that could lead to a loss of NT$50 billion in annual tax revenue.
In response to questions from Taiwan Solidarity Union lawmaker Hsu Chung-hsin (許忠信) at the legislature’s question-and-answer session yesterday, Chang said that the Economic Daily News had overestimated the possible tax loss.
All things considered, the project will bring in more tax revenue because it will enlarge tax bases by, for example, attracting multinational conglomerates to set up headquarters and encouraging new industries to use Taiwan as a base for their operations, Chang said.
Democratic Progressive Party (DPP) Legislators Tsai Huang-liang (蔡煌瑯) and Lin Shu-fen (林淑芬) expressed concern that farmers could suffer as a result of the country moving toward further liberalization.
In response, Council of Agriculture Minister Chen Bao-ji (陳保基) downplayed the comments made by Vice Minister of Economic Affairs Bill Cho (卓士昭) earlier this week that the production value of the agriculture sector would fall by NT$72.77 billion if Taiwan were to secure a place in the emerging Trans-Pacific Partnership.
The estimated loss in production value not only included agricultural production, but also the production of gas, crude oil and fiber, he said, without elaborating further.
Meanwhile, Lin asked Cabinet officials if the cross-strait Economic Cooperation Framework Agreement, which took effect in September 2010, has delivered what was promised to Taiwan in terms of preferential tariffs for Taiwanese businesses and exports to markets in China and in ASEAN countries.
Citing statistics that she said were compiled by government agencies, Lin said that over the past two years the ECFA had failed to deliver the benefits that the government said it would.
Premier Jiang Yi-huah (江宜樺), Minister of Economic Affairs Chang Chia-juch (張家祝), Council for Economic Planning and Development Minister Kuan Chung-ming (管中閔) all disagreed with Lin, but they were unable to provide figures to support their views, saying that they did not have the information at hand.