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China Times: Deal with deep-rooted problems as economy recovers

China Times: Deal with deep-rooted problems as economy recovers

Academia Sinica recently revised upwards its forecast for Taiwan's 2014 economic growth from 2.89 percent to 3.31 percent while the Chung-Hua Institution for Economic Research bumped up its growth projection to 3.15 percent. Taiwan's unemployment rate of 3.92 percent in June was the lowest for any June in 14 years, and net tax revenues in the first six months of the year increased 5.5 percent to NT$1.09 trillion (US$36.35 billion). Taken together, these figures indicate that Taiwan's economy, after being stagnant for a long time, is recovering, and we believe that presents a good opportunity for the country to address deep-seated problems. The first problem is the need to reform the system used to tax gains on real estate sales and impose higher tax rates on the gains from the sale of houses not occupied by their owners to check rampant speculation in the real estate market. This was the consensus of experts and scholars at a forum organized by the Ministry of Finance on taxing income from property sales, and is vital to checking rising property prices, which saw the house-price-to-income ratio rise to 15.1 in 2013. The second problem is Taiwan's low interest rates and commodity prices, which have dampened manufacturers' enthusiasm for turning out new products of better quality. One way to solve the problem would be to increase the price of energy because low energy prices contribute to low commodity prices and discourage manufacturers from improving their energy efficiency in production. Our last hope is for the government to use the higher tax revenues to reduce the number of dispatched workers it hires from manpower agencies and give raises or bonuses to outstanding civil servants to encourage a virtuous circle of positive wage growth. The government should take the lead in ridding the country of the disgrace of the country's low per capita earnings. (Editorial abstract--- July 27, 2014) (By Maubo Chang)


Updated : 2020-12-03 07:01 GMT+08:00