By Catherine Snowdon
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Opinions divided on how best to attract investment |
A member of the ruling political party in Taiwan (Kuomintang) has been forced to defend a controversial proposal to offer lower corporate income tax rates to the world's biggest companies, if they invest in Taiwan.
Critics of the plan, including the opposition Democratic Progressive Party claiming it would be like handing large companies money. After the expiration of the Statute for Upgrading Industry, which offered tax incentives to investing companies, the new bill was aimed at promoting industrial innovation. In a clause supported by lawmaker Ting Shou-chung, the world's 500 biggest multinational companies would be afforded a corporate income tax rate of 15%, if they were to set up their Asia-Pacific regional headquarters in Taiwan.
Ting has now spoken out against the attacks made on the proposal, stating that in his main constituency of Tianmu in Taipei City, previously a focus of the international community, the number of foreign residents has been declining and foreign chambers of commerce have been leaving Taiwan.
In the past, the lawmaker said, the movement was caused by cross-strait (between mainland China and Taiwan) confrontation, but more recently, an uncompetitive tax structure is to blame.
Referring to data from the Investment Commission of the Ministry of Economic Affairs, he said foreign investment has declined from $15.3 billion in 1997 to $4.7 billion in 2009.
