Economy

Legislature approves Statute for Industrial Innovation

The KMT party caucus cheers the passing of the Statute for Industrial Innovation at the Legislative Yuan April 16. (CNA)

• Publication Date：04/19/2010
• Source： United Daily News

After a marathon session, the Legislature passed the final reading of the Statute for Industrial Innovation April 16, allowing the government to offer tax breaks, subsidies and other incentives to encourage business innovation and hiring.

The ruling Kuomintang has been in interparty negotiation with the opposition Democratic Progressive Party aggressively to push through the statute to fill the legal void left behind by the Statute for Upgrading Industries, which expired Dec. 31, 2009. The SUI was believed to be instrumental in boosting the island’s information technology sector.

In the end, the key demands of the KMT were all included in the final version of the bill. Premier Wu Den-yih showed up later at the Legislature to express his appreciation for legislators’ support.

According to the statute, between Jan. 1, 2010 and Dec. 31, 2019, businesses in Taiwan can enjoy 15-percent tax credits on their research and development expenses.

To improve the country’s employment situation, the statute also says that small and medium-sized enterprises will be given subsidies if they go out of their way to create work opportunities. The actual level of subsidies has not been set, but will be determined at a future date by the Cabinet-level Council for Labor Affairs. The provision is expected to benefit some 1.24 million SMEs on the island.

A special clause has also been added to the statute that will help prevent businesses from engaging in real estate speculation within industrial parks.

The new statute allows municipalities and local governments to formulate their own industrial development policies, establish industrial parks and ask the central government to provide subsidies and incentive measures. Sectors such as medical services, cultural and creative industries, agricultural technologies and environmental technologies can all apply to set up their own industrial parks.

The statute also stipulates that the Executive Yuan set up national development funds to finance or invest in major projects or businesses that will help increase industrial output or improve industrial structures.

In related news, the KMT’s proposal to cut the business income tax rate to 17 percent is slated to receive legislative approval during the week of April 19 to 23 at the earliest.

(This article originally appeared in the “United Daily News” April 17.)