With the Statute for Industrial Innovation passing its final reading at the Legislature and a cross-Taiwan Strait economic cooperation framework agreement expected to be signed soon, the idea of establishing a special economic and trade operations zone has come into the spotlight again.
In a recent interview with the Chinese-language “Economic Daily News,” President Ma Ying-jeou revealed that plans for such a zone to attract overseas Taiwan businesspeople to reinvest in Taiwan and to draw multinational corporations to set up operations headquarters have been relaunched following suspension since the end of November last year.
Meanwhile, Minister without Portfolio Yiin Chii-ming said that a concrete course of action in this regard would be put forward within one month’s time.
The Executive Yuan already delivered a report to Ma at the end of March on the planning direction for the special economic and trade operations zone.
Council for Economic Planning and Development Minister Tsai Hsung-hsiung stated that the proposed zone would have four special characteristics.
Firstly, it would feature a one-stop window for handling harbor bureau, customs and trade services in order to make the customs clearance process quicker and more convenient, Tsai said.
Secondly, he continued, it would feature competitive tax rates, and thirdly, further relaxation of restrictions on the hiring of foreign labor. Finally, mainland products that are banned from import into Taiwan would be allowed to enter the zone for processing and then re-export to a third destination, he added.
The issues of tax rates and foreign labor had been major sticking points in the past concerning the establishment of a special economic and trade operations zone. The successful passage of the draft Statute for Industrial Innovation has solved the tax side of the equation. After the business income tax rate is reduced to 17 percent, it will mark the second lowest level in the Asia-Pacific region, behind only Hong Kong’s rate of 16.5 percent.
As for foreign labor salaries, Tsai said that the minimum wage of NT$17,280 (US$550) per month will continue to apply. He added that the issue of whether food, lodging and other expenses for these workers would be included when calculating their salaries would require further consultations with the Council of Labor Affairs before a final decision could be made.
President Ma said in the “Economic Daily News” interview that the Statute for Industrial Innovation, a cross-strait ECFA and the planned economic and trade operations zone are all part of the government’s economic strategy to transform Taiwan into a global innovation center and a key economic and trade hub in the Asia-Pacific region. (SB)