The Japanese Chamber of Commerce and Industry in Taipei yesterday urged the government to improve the business environment in Taiwan by freezing the corporate income tax and taking bold steps to increase inbound tourists.
The business group made the appeal after releasing its 10th annual position paper.
“Taiwan has gained significant headway in improving its business environment, but more needs to be done to attract foreign companies,” chamber chairman Satoru Ohashi told a news conference.
The trade group said it failed to understand why the government raised the corporate income tax from 17 percent to 20 percent this year, while most other countries cut it to woo foreign capital.
The 3 percent tax hike ran counter the global trend and lessened the willingness of Japanese firms to expand investment in Taiwan, Ohashi said, adding that a few had no choice but to pull out of the market because of the extra tax burden.
Japanese corporations have long viewed Taiwan as a strategically important base in Asia and authorities should seek to consolidate the nation’s position in the region by freezing corporate income tax.
Japan is Taiwan’s third-largest trade partner, with bilateral trade amounting to US$62.74 billion last year, a 4.26 percent increase from a year earlier, National Development Council data showed.
Direct investment by Japanese firms surged 84.69 percent from 2016 to US$641 million last year, the data showed.
Taiwan should also make bold moves to prop up its tourism industry, as part of its effort to battle potential private consumption erosion linked to an aging population and decline in birthrate, the chamber said, adding that authorities have been conservative in their attempts to resolve the situation.
Taiwanese made 4.56 million visits to Japan last year, while Japanese made only 1.9 million visits to Taiwan, the chamber said.
It added that it fails to see measures taken by Taiwan to narrow the gap.
Taiwan set a modest goal of growing its inbound tourists to 1.14 million by 2020, after the number reached 10.74 million last year, the chamber said.
By contrast, Japan drastically raised its inbound tourist target to 40 million for 2020, after the number hit 24.04 million in 2016 and 28.69 million last year, the chamber said.
Authorities at all levels in Japan have given their all to help realize this ambitious goal, it said, adding that Taiwan should also aim high and allow local governments and communities to take the lead in creating and promoting tourist attractions with central government funding.
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