The Chinese Nationalist Party (KMT) caucus yesterday threatened to push through a controversial draft act on innovative industries today despite calls from tax reform advocates to halt review of the bill.
KMT caucus secretary-general Lin Hung-chih (林鴻池) said that if the KMT and Democratic Progressive Party (DPP) caucuses failed to reach agreement in cross-party negotiations today, he would mobilize KMT lawmakers to call for a vote on every article of the proposed bill, which would relax restrictions on the establishment of industrial parks or zones.
“If the DPP decides to boycott the draft act on innovative industries (產業創新條例), we will deal with it in accordance with legislative procedures in order to live up to the expectations of the public and local industries, meaning deliberating and voting on every article in the bill,” Lin said.
Lin said the caucus would discipline any KMT lawmaker who failed to show up and support the proposal on the legislative floor.
Review of the bill has been brought to a standstill because governing and opposition lawmakers have so far failed to see eye to eye on the business income tax rates stipulated in the draft.
The bill initiated by the Executive Yuan, which will head today's agenda on the legislative floor, proposes that the business income tax rate for corporations that establish operational headquarters in Taiwan should be maintained at 20 percent, with tax breaks provided for innovation and investment income.
The bill is meant as an extension of the Act for Industrial Upgrading (促進產業升級條例), which expired at the end of last year, and aims to encourage businesses to invest in innovation, research and development.
The DPP caucus proposed on March 26 that the business income tax rate should be cut to 17.5 percent and applied to all businesses.
The government opposed the proposal, saying it would lead to a shortfall of NT$40.3 billion (US$1.3 billion) in annual tax revenues.
DPP caucus whip Lee Chun-yee (李俊毅) urged the KMT caucus, which dominates the legislature, to negotiate the details of the proposed bill rather than ram it through.
At a press conference yesterday morning, tax reform activists urged the legislature to review the bill again “before it is too late.”
Wang Jung-chang (王榮璋), convener of the Fairtax Alliance and a former DPP legislator, said the bill, if passed, would fail to establish a fair tax system and could only benefit big corporations.
Thomas Chan (詹順貴), a representative of the Taiwan Rural Front, said Article 10 is the most controversial. Under that proposed article, Chan said, any government agency, public enterprise or private individual could apply to develop and run an industrial park so long as they produce a development plan. The government will help acquire the land — even state-owned tracts of land, he added.
“The bill is poised to allow big business conglomerates to steal land from disadvantaged people through a land expropriation program,” he said.
“[The government] has granted tax breaks equaling NT$14.8 billion every year, creating many big corporations and widening the gap between the rich and the poor,” he said.
ADDITIONAL REPORTING BY CNA
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