Taiwan editorial abstract (File 1 of a daily roundup)
A report of the Tax Reform Committee indicates that Taiwan's short-term tax revenues are dropping while long-term tax revenues are "extremely uncertain." But the tax disaster is not over yet, as business and industrial groups are lobbying to get a tax cut act approved by the Legislative Yuan.
Under the strong lobbying of heavyweight entrepreneurs, the Executive Yuan and the Legislative Yuan hope to lower the corporate income tax rate to 15 percent for big international corporations which locate their operational headquarters in Taiwan. If the proposed "industrial innovation act" passes the Legislature, big domestic corporations will be the real beneficiaries, and the national treasury the loser, as tax revenues will be sacrificed.
Different from Singapore and Hong Kong, Taiwan has a wide spectrum of industries, but rather than creating incentives for foreign corporations to help with the fundamental restructuring of local industry, the government is trying to copy the model of "transit trade zones."
The preferential treatment for operational centers is in fact a tax cut for big Taiwanese enterprises, in the name of attracting international corporations to invest in Taiwan.
Let's remind the administration that the government is sitting on a huge debt, and that when international corporations decide on investing in Taiwan, they will weigh the overall environment more heavily than their costs.
(By Lillian Lin)