The General Chamber of Commerce last week urged the government to expand relief funds available to companies affected by the COVID-19 pandemic and lower the threshold for qualification. The chamber’s call came just weeks after the annual white paper from the Taipei-based Chinese National Federation of Industries said that the government’s relief and stimulus measures were inadequate and could be better spent.
Although the Executive Yuan on July 23 approved a special relief package amounting to NT$210 billion (US$7.12 billion) in subsidies for firms hurt by the COVID-19 pandemic and funding for vaccines, its delay in two extraordinary legislative sessions this summer affected the ability of some government agencies to deliver promised subsidies.
The groups’ requests reflect worries that the relief funds are not reaching the companies that need it as border controls and quarantine requirements remain in place, as well as fears that the nation’s economy might need to brace for a tough fourth quarter amid softening demand for Taiwan’s exports, in light of escalating US-China trade tensions and a second global wave of COVID-19 infections coinciding with the peak of influenza season.
Consequently, apart from appealing for more funds, the groups called on the government to issue yet another round of stimulus vouchers, offer tax relief for small and medium-sized businesses, enhance access to corporate financing, and provide an exemption for the 5 percent tax on undistributed earnings as a supporting measure for businesses.
However, is there a need for additional relief? The COVID-19 situation in Taiwan is relatively under control and there was a boom in domestic tourism over the summer helped by the government’s Triple Stimulus Voucher program, which has helped domestic consumption return to normal and the economy gradually recover.
Fitch Ratings on Friday upgraded its forecast for the nation’s economy to annual growth of 1 percent for this year, compared with the 0.2 percent contraction it predicted in June and the government’s GDP growth forecast of 1.56 percent.
Asking for tax cuts is like adding fuel to the fire, further harming the nation’s fiscal situation: Relief programs are being launched as a temporary policy, but any tax cuts would mean long-term reductions in tax revenues and could seriously affect the nation’s fiscal profile. What is more, the corporate income tax must be paid only when a company makes money, so why should it be lowered now?
History has taught us that while cutting taxes is a politically popular move, raising taxes is not, which means that once taxes are cut, it would be hard to restore them to their previous levels, which is also a challenge for Taiwan’s fiscal health.
The previous and current governments have launched a spate of tax cuts since 2000, touting them as necessary moves to revive the economy. The truth is that lowering the land value incremental tax rate resulted in more real-estate speculation, the reduction in the inheritance and gift tax rate led businesspeople to repatriate funds into the property market rather than into real economic activity, and the dividend income tax cuts and the tax breaks for repatriated funds have not yielded the expected economic propulsion benefits.
Another tranche of stimulus vouchers would do little to boost the economy at this point, as private consumption has returned to normal. Despite uncertainties in terms of the global pandemic and the situation of major economies, the government should not rush to launch another voucher program or tax cuts.
As the nation’s finances have significantly deteriorated this year due to the economic downturn, lower tax revenues and higher expenditures, the government needs to avoid recklessly spending money in case the economy again encounters headwinds.
The image was oddly quiet. No speeches, no flags, no dramatic announcements — just a Chinese cargo ship cutting through arctic ice and arriving in Britain in October. The Istanbul Bridge completed a journey that once existed only in theory, shaving weeks off traditional shipping routes. On paper, it was a story about efficiency. In strategic terms, it was about timing. Much like politics, arriving early matters. Especially when the route, the rules and the traffic are still undefined. For years, global politics has trained us to watch the loud moments: warships in the Taiwan Strait, sanctions announced at news conferences, leaders trading
The saga of Sarah Dzafce, the disgraced former Miss Finland, is far more significant than a mere beauty pageant controversy. It serves as a potent and painful contemporary lesson in global cultural ethics and the absolute necessity of racial respect. Her public career was instantly pulverized not by a lapse in judgement, but by a deliberate act of racial hostility, the flames of which swiftly encircled the globe. The offensive action was simple, yet profoundly provocative: a 15-second video in which Dzafce performed the infamous “slanted eyes” gesture — a crude, historically loaded caricature of East Asian features used in Western
Is a new foreign partner for Taiwan emerging in the Middle East? Last week, Taiwanese media reported that Deputy Minister of Foreign Affairs Francois Wu (吳志中) secretly visited Israel, a country with whom Taiwan has long shared unofficial relations but which has approached those relations cautiously. In the wake of China’s implicit but clear support for Hamas and Iran in the wake of the October 2023 assault on Israel, Jerusalem’s calculus may be changing. Both small countries facing literal existential threats, Israel and Taiwan have much to gain from closer ties. In his recent op-ed for the Washington Post, President William
A stabbing attack inside and near two busy Taipei MRT stations on Friday evening shocked the nation and made headlines in many foreign and local news media, as such indiscriminate attacks are rare in Taiwan. Four people died, including the 27-year-old suspect, and 11 people sustained injuries. At Taipei Main Station, the suspect threw smoke grenades near two exits and fatally stabbed one person who tried to stop him. He later made his way to Eslite Spectrum Nanxi department store near Zhongshan MRT Station, where he threw more smoke grenades and fatally stabbed a person on a scooter by the roadside.
RSS