Premier Liu Chao-shiuan (劉兆玄) said yesterday that the nation could become a regional assets management and capital-raising center if its tax system were made more competitive.
He said the Cabinet was working on reforms to lower business income, inheritance and gift taxes.
The premier made the remarks at a breakfast meeting organized by the Chinese National Association of Industry and Commerce (工商協進會) during which he spoke of the administration’s goals to lighten tax burdens and streamline governance.
Business leaders suggested that to make the nation’s tax system globally competitive, business income, inheritance, gift and commodity taxes should be lowered.
Business income tax rates should be lowered to below 20 percent and a 10 percent undistributed earnings surtax should be canceled, while the gap between the aggregate income tax rates and business income tax rates should also be narrowed, they said.
The business leaders said that maximum marginal tax rates for inheritance and gift taxes should be lowered to 20 percent.
The minimum tax system and commodity tax on basic goods such as drinks, glass and cement should be canceled, they said.
Association chairman Theodore Huang (黃茂雄) said the premier had realized that if Taiwan was to turn itself into an assets management and capital-raising center in the Asia-Pacific region, it will have to speed up the deregulation of outdated financial regulations and administrative measures.
Taiwan also needs to revise its tax system to make it more competitive and to allow businesses to more easily raise funds, Huang said.
Separately, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) chairman Morris Chang (張忠謀) yesterday called for increased taxes on the wealthy to help the government strike a social balance.
People who earn at least NT$3 million (US$98,700) a year can be considered wealthy, Chang said.
He said that increasing taxes on the rich would be a moderate method to balance wealth distribution in the society and help roll back discontent among the poor.
Rich people in the US pay higher taxes than those in Taiwan, Chang said, adding that US presidential candidate Barack Obama has also proposed raising taxes on the wealthy.
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