Proposed Taiwan business tax unfavourable for finance sector
(2 May 2013 – Taiwan) Taiwan’s Financial Supervisory Commission (FSC) is concerned about a new business tax that may cut weak profits in an unfavourable economic environment.
FSC Chairman Chen Yuh-chang has questioned the proposal to raise the business tax on Taiwan’s financial institutions from 5 percent from 2 percent to increase government revenues.
"While domestic financial institutions have improved their earnings ability in recent years, they lag behind their international peers in terms of return on assets and equity," Chen said.
The government should instead craft comprehensive measures to strengthen its finances rather than increase the tax burden of any particular sector.
Pro-tax lawmakers said financial institutions should stop enjoying favourable taxation now that average bad loan levels have dropped below 1 percent for two straight years.
They said a one percentage point increase in the business tax could generate an extra US$1 billion (A$960 million) a year for the national treasury, which is struggling to keep different pension funds afloat.
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