The government is considering extending a five-year tax break to both local and foreign businesses that make Taiwan their regional operations headquarters, a government report said yesterday.
The report, drafted by the Ministry of Economic Affairs, said the government is working on a bill to further encourage companies involved in manufacturing or technological services to set up their headquarters in Taiwan and thus boost domestic and foreign investments here.
Indeed, participants at the investment panel for the recently concluded Economic Development Advisory Conference (經發會) had recommended that Taiwan introduce the Singaporean model of encouraging investment by multinational businesses through the provision of certain incentives such as tax breaks.
Singapore currently offers a 10-year, tax-free holiday for multinational corporations that maintain regional business operations centers in the city-state.
While that recommendation by the investment panel didn't gain consensus support in the 120-member conference because of concerns that it offered tax incentives to foreign businesses only -- meaning the Cabinet is not bound to devise policy proposals and bills to match -- the economics ministry did send a revised version of the recommendation to the legislature's economic subcommittee yesterday.
The draft bill is expected be completed in November for further legislative review.
The government is now looking for ways to revive the country's sagging economy, which contracted 2.35 percent in the second quarter, and stem an unemployment rate that has risen to 5.17 percent as of the end of August.
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