A Cabinet meeting yesterday approved an amendment to the Statute for Developing Small and Medium-sized Enterprises (中小企業發展條例草案) aimed at addressing the long-term problem of wage stagnation — by offering tax credits.
Premier Jiang Yi-huah (江宜樺) told the meeting that the use of policy tools to create incentives for businesses to pay their employees more was as important as using moral suasion, a press statement said.
Under the amendment, which must be approved by the Legislative Yuan before it can take effect, a firm would be entitled to a deduction of NT$130 (US$4.30) on its business income tax for every NT$100 it spends in increased salaries for its local entry-level employees, Vice Minister of Economic Affairs Shen Jong-chin (沈榮津) told a press conference.
The ministry said it expected that the policy would prompt about one-third of small and medium-sized enterprises, or 430,000, to increase salaries.
About 98 percent of Taiwanese firms, estimated at 1.3 million, are small and medium-sized companies, employing 8.5 million workers.
Shen gave an example of how the policy would benefit a firm.
If a small or medium-sized company that pays its lower-level Taiwan-based employees NT$5 million each year announces a 20 percent pay raise for those people, it will be entitled to a deduction of NT$6.18 million on its income tax in the year the wages increase.
The deductible expense in this case is calculated by adding the NT$5 million in wages, NT$400,000 (a mandated increase in personnel costs brought about by an 8 percent legislated adjustment to minimum-wage rules) and NT$780,000 (the remaining 12 percent of wage increase multiplied by 1.3, according to the new tax credit), Shen said.
A group of Taiwanese-American and Tibetan-American students at Harvard University on Saturday disrupted Chinese Ambassador to the US Xie Feng’s (謝鋒) speech at the school, accusing him of being responsible for numerous human rights violations. Four students — two Taiwanese Americans and two from Tibet — held up banners inside a conference hall where Xie was delivering a speech at the opening ceremony of the Harvard Kennedy School China Conference 2024. In a video clip provided by the Coalition of Students Resisting the CCP (Chinese Communist Party), Taiwanese-American Cosette Wu (吳亭樺) and Tibetan-American Tsering Yangchen are seen holding banners that together read:
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