When the bill was first submitted to the committee for review in November of last year, a majority of legislators expressed concerns about lowering import duties at a time when the government was already facing financial difficulties.
The lawmakers asked the Ministry of Finance to resubmit the bill for review along with a detailed explanation of the reasons for the proposed tariff reductions and the expected impact of cutting the duties on the selected import items, ranging from automobile engines and natural gas-powered buses to monitors and lenses for single-lens cameras.
After its second review, the committee passed the draft amendment to reduce import tariffs aimed at boosting the competitiveness of local industry, complying with energy saving and carbon reduction goals, and rationalizing the tax system structure.
Pending a second and final reading in the Legisalture, tariffs on the listed items would be slashed to between 0 percent and 17.5 percent from the current levels ranging from 2.5 percent to 25 percent. For example, the duty on automobile engines would be reduced from 20 percent at present to just 17.5 percent, according to the MOF.
The ministry stressed that consensus was arrived at on all of the proposed tariff cuts for the various import items following consultations with the Ministry of Economic Affairs, the Council of Agriculture, as well as other related agencies and industry associations. It noted that the reductions would help boost the competitive edge of Taiwan’s exports.
For example, one industry expected to benefit from the cuts is the tool-die sector. Taiwan ranks fourth in the world in hand tool exports at present. However, there is currently a 5-percent duty on imports of tungsten carbide steel, primarily used for making hand tools and die casting molds, as it is listed by customs authorities as a “finished product.” Manufacturers in this sector object to this classification, considering carbide tungsten to be a “raw material.”
Following the draft amendment’s passage, the duty on tungsten carbide steel imports will be completely removed, helping to strengthen even further the competitiveness of the island’s exports in the tool sector, the ministry said. (SB)