The government should provide support for family-operated small businesses through tax exemptions funded by last year’s tax surplus in a bid to boost the economy across sectors, Democratic Progressive Party (DPP) lawmakers said at a news conference on Wednesday.
“We urge the Ministry of Economic Affairs (MOEA) to provide a tax exemption for small-scale business entities. This is a good way to use the NT$180 billion [US$5.91 billion] surplus tax revenue from 2022, alongside the plan for NT$6,000 cash rebates for every citizen,” DPP Legislator Chung Chia-pin (鍾佳濱) said at the Legislative Yuan in Taipei.
Chung, who is co-convener of the Legislative Yuan’s Finance Committee, said that mom-and-pop shops, family-run restaurants and other small businesses have suffered across the board from inflation, rising costs of materials and imports, price gouging by suppliers and intermediary distributors, and unreasonable rent increases.
Photo: CNA
Other DPP legislators present included Kuo Kuo-wen (郭國文), Wu Chi-ming (吳琪銘), Chiang Yung-chang (江永昌), Lai Hui-yuan (賴惠員) and Tang Hui-jen (湯蕙禎).
Small businesses should be eligible for a tax exemption due to the “Stimulus Plan 4.0” implemented by the ministry in 2021, they said.
About 440,000 small businesses applied for that COVID-19 relief package as they were hit by an economic downturn during the COVID-19 pandemic, but only one-quarter of applicants received funding, they said.
“At that time, the MOEA only disbursed NT$4.8 billion out of the allocated NT$36 billion,” Chung said. “We ask that government agencies better understand the hardships and severe conditions that small businesses have had to deal with in the past two years.”
In 2021, the total tax paid by small businesses came to only NT$2.85 billion, which was a much lower figure than previously, Chung said.
The MOEA should give relief directly to those 440,000 small businesses that had applied, and allocate NT$3 billion out of the NT$180 billion surplus tax revenue to fund their business taxes from the past year, he added.
“Doing this directly would not burden small-business owners, who would otherwise have to go to local district offices to file applications and face bureaucratic red tape. These people would immediately feel that the government is doing something for them,” he said.
“The government can bear the financial cost to grant tax exemptions for small businesses due to the surplus tax revenue from last year,” Kuo said.
“The MOEA would be seen to be spending the government budget most effectively on the real needs of society, and it would relieve financial pressures on many family-run stores,” Kuo said.
Since President Tsai Ing-wen (蔡英文) took office, tax revenue from businesses has steadily increased every year, Chiang said.
“In 2016, total tax revenue was NT$378.3 billion, and through 2021 it increased to NT$499.3 billion,” Chiang said.
“Despite these figures, small businesses have shown much lower growth over those years, caused by the economic downturn due to the pandemic, which led to a one-third decline on average for business taxes levied during this period,” Chiang said.
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