The difference between the government’s GDP projection and the nation’s real economic performance accounts for a tax surplus from last year, finance officials told lawmakers yesterday.
The comments came after people questioned the legitimacy of tax surpluses from the past two years, as the government has said it would use part of a NT$450 billion (US$14.74 billion) tax surplus to distribute cash payments of NT$6,000 next month.
Directorate-General of Budget, Accounting and Statistics (DGBAS) Minister Chu Tzer-ming (朱澤民) said that the agency in August 2020 forecast GDP growth of 3.92 percent for 2021, but the real growth approached 6.5 percent, thanks to strong demand for electronic devices used in remote work and education.
Photo: CNA
Manufacturing sectors and individuals gained much higher incomes than expected, which inflated state coffers, Chu said.
DGBAS officials normally prepare fiscal budgets up to two years in advance based on data from recent years, and were therefore unable to account for the economic effects of the COVID-19 pandemic and the Russian invasion of Ukraine.
In 2021, securities and property transfers also outperformed government predictions by a wide margin and boosted related taxes, Chu said.
Major firms posted robust earnings in the first half of last year, but saw acute inventory corrections in the final quarter, as drastic interest rate hikes by global central banks hurt demand for goods and services, he said.
This resulted in another year of massive tax surpluses, helped by a quick recovery in private consumption after COVID-19 restrictions were relaxed and the nation reopened its borders, the DGBAS said.
When factoring in COVID-19 spending, the government incurred a small deficit last year, Chu said.
Acting Minister of Finance Frank Juan (阮清華) said the two-year time lag plays an important part in creating tax surpluses or shortfalls.
GDP growth over the past two years deviated from long-term averages, making budget projections difficult, Juan said.
Former minister of finance Su Jain-rong (蘇建榮) told a tax forum yesterday that it is not accurate to say tax surpluses are policy mistakes, as some officials have said.
Tax surpluses stem from the nation’s stronger-than-expected economic performance, said Su, who has resumed his position as a professor of finance at National Taipei University.
Su said he had reservations about the cash distribution plan, saying that the government should first seek to pay off its debt and enhance its financial resilience to avoid fiscal deficits or financial shocks.
The government has accumulated huge debts, which could become burdens on future generations, Su said.
purpose: Tesla’s CEO sought to meet senior Chinese officials to discuss the rollout of its ‘full self-driving’ software in China and approval to transfer data they had collected Tesla Inc CEO Elon Musk arrived in Beijing yesterday on an unannounced visit, where he is expected to meet senior officials to discuss the rollout of "full self-driving" (FSD) software and permission to transfer data overseas, according to a person with knowledge of the matter. Chinese state media reported that he met Premier Li Qiang (李強) in Beijing, during which Li told Musk that Tesla's development in China could be regarded as a successful example of US-China economic and trade cooperation. Musk confirmed his meeting with the premier yesterday with a post on social media platform X. "Honored to meet with Premier Li
Dutch brewing company Heineken NV on Friday announced an investment of NT$13.5 billion (US$414.62 million) over the next five years in Taiwan. The first multinational brewing company to operate in Taiwan, Heineken made the statement at a ceremony held at its brewery in Pingtung County. It also outlined its efforts to make the brewery “net zero” by 2030. Heineken has been in the Taiwanese market for 20 years, Heineken Taiwan managing director Jeff Wu (吳建甫) said. With strong support from local consumers, the Dutch brewery decided to transition from sales to manufacturing in the country, Wu said. Heineken assumed majority ownership and management rights
ARTIFICIAL INTELLIGENCE: The chipmaker last month raised its capital spending by 28 percent for this year to NT$32 billion from a previous estimate of NT$25 billion Contract chipmaker Powerchip Semiconductor Manufacturing Corp (力積電子) yesterday launched a new 12-inch fab, tapping into advanced chip-on-wafer-on-substrate (CoWoS) packaging technology to support rising demand for artificial intelligence (AI) devices. Powerchip is to offer interposers, one of three parts in CoWoS packaging technology, with shipments scheduled for the second half of this year, Powerchip chairman Frank Huang (黃崇仁) told reporters on the sidelines of a fab inauguration ceremony in the Tongluo Science Park (銅鑼科學園區) in Miaoli County yesterday. “We are working with customers to supply CoWoS-related business, utilizing part of this new fab’s capacity,” Huang said, adding that Powerchip intended to bridge
Microsoft Corp yesterday said that it would create Thailand’s first data center region to boost cloud and artificial intelligence (AI) infrastructure, promising AI training to more than 100,000 people to develop tech. Bangkok is a key economic player in Southeast Asia, but it has lagged behind Indonesia and Singapore when it comes to the tech industry. Thailand has an “incredible opportunity to build a digital-first, AI-powered future,” Microsoft chairman and chief executive officer Satya Nadella said at an event in Bangkok. Data center regions are physical locations that store computing infrastructure, allowing secure and reliable access to cloud platforms. The global embrace of AI