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Cut in corporate income tax rate welcomed

Cut in corporate income tax rate welcomed

Taipei, May 28 (CNA) Companies in fields ranging from biotechnology to financial services welcomed the Legislative Yuan's reduction of Taiwan's corporate income tax rate to 17 percent from 20 percent on Friday.
Yu Jui-ming, chief investment officer of Prudential Financial Securities Investment Trust Enterprise Co., said the significance of the tax cut is similar to that of signing a Taiwan-China trade pact.
"They both help boost the international competitiveness of Taiwanese industries, " Yu said, after the Legislature amended the Income Tax Act to lower the tax rate.
The cut will bring Taiwan's corporate tax rate level with Singapore's and close to Hong Kong's 16.5 percent, while falling even further below the 25 percent tax rate found in China, India, South Korea and Malaysia, according to Yu.
Though the tax cut will cause the government's general tax revenues to decline, it should help Taiwan expand regional trade and encourage enterprises to boost investment and hire more workers, Yu said.
Kuo Chien-cheng, a fund manager at Taishin Securities Investment Trust Co., said the tax policy indirectly increases the profits of local businesses.
Labor-intensive conventional manufacturing sectors will be the largest beneficiary of the tax cut because they have paid a corporate tax rate of 25 percent for many years without ever benefiting from any of the government's incentive programs that were directed at high-tech companies, Kuo said.
Meanwhile, most petrochemical businesses, including the Formosa Plastics Group, said the lower rate would help Taiwanese companies keep their roots on the island and draw more international investment in Taiwan's stock market.
Lee Chih-hsien, chairman of the adhesive tape maker Yem Chio Co., also praised the tax cut. "It is good news," he said.
The new rate will take effect retroactively from the beginning of this year, according to the revision.
(By Maranda Hsu, Chao Hsiao-hui and Elizabeth Hsu)




Updated : 2021-06-18 01:25 GMT+08:00