The Mainland Affairs Council yesterday released drafts of three regulations to implement the recommendations of the Economic Development Advi-sory Conference.
The council has issued a revised version of the Statute Governing the Relations Between the People of the Taiwan Area and the Mainland Area that reduces the tax burden on Taiwanese businessmen investing in China through third countries.
The draft also requires Taiwanese businessmen investing in China to register in Taiwan and allows Chinese investments in local real estate.
Under current law, Taiwan enterprises investing directly in China are allowed to claim a credit for the taxes they pay in China against their tax bills in Taiwan.
But most Taiwan businesses investing in China do so through a third country, which means they must pay taxes to three governments -- China, Taiwan and the third country -- if they remit capital back to Taiwan.
The draft put forth yesterday would encourage Taiwan investors to remit capital back to Taiwan by reducing this tax burden.
Vice Minister of Finance Sean Chen (
Minister of Finance Yen Ching-chang (
The committee will be made up of representatives of the Research, Development and Evaluation Commission, the Ministry of Finance, the Ministry of Economic Affairs and the Council for Economic Planning and Development.
Chen said the committee would study how best to achieve a balanced central government budget in the next five to 10 years.
Because tax revenue is tied to the nation's economic performance and cannot be guaranteed, it's practical to control spending, he said.
Chen said personnel was a critically important area of government spending. The committee will also include representatives of the Central Personnel Administration to review the staffing and organization of public services, he said.
The Mainland Affairs Council also proposed some revisions to the statute that would allow unregistered Taiwanese investments in China to gain legal status within six months of the passage of the amendment in the Legislative Yuan.
Investors who fail to register within the six months will be fined anything between a minimum of NT$1 million and a maximum of NT$5 million.
Finally, the council also revised a formal statute that would allow capital from China to be invested in Taiwan real estate after receiving government approval.
The revised statutes must be approved by the Cabinet before they are sent to the Legislative Yuan for review and an eventual vote.
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