Cross-strait taxation agreement ready to be signed

By John Liu, The China Post

TAIPEI, Taiwan — Finance Minister Chang Sheng-ford (張盛和) said yesterday that the governments of Taiwan and mainland China have reached a consensus regarding the cross-strait taxation agreement. Chang said in the Legislative Yuan yesterday that the Chinese government has consented to include a “non-retroactivity” clause in the agreement, and once a consensus is reached within Taiwan, the two governments will ink the taxation agreement immediately. Chang expressed his hope that the different political parties may reach a consensus regarding the taxation agreement. After signing the agreement, the two governments will then share information and organize taxation authorities so as to avoid double taxation situations in the future. As some legislators are still unsure about the agreement, Chang paid a visit to Legislative Yuan Speaker Wang Jin-pyng (王金平) yesterday, seeking his support for passing the bill in the Legislature. Not to Be Signed Soon: Legislative Yuan Speaker The Ministry of Finance needs to study the effect on local businesses’ interests and taxation structures that may be caused by the cross-strait taxation agreement, Wang said, adding that the ministry has to establish sufficient communication with local businesses. It is critical that “plenty of considerations are made before making any moves,” Chang said, adding that the agreement must be accepted by the majority of those affected. As such, the agreement is not likely to be signed soon, Wang said. Chang said in response that the government is not under any pressure to sign the agreement soon, and the ministry will “communicate comprehensively” to allay concerns from all different parties. “If there are still concerns, we are not under pressure to sign the agreement right now,” Chang said. The Ministry of Finance will try to allay local businesses’ concerns about the new agreement. It will communicate with business groups such as the certified public accountant association, the Chinese National Federation of Industries and the General Chamber of Commerce of the Republic of China. Pact ‘Works in everyone’s favor’ Chang said that the purpose of the cross-strait taxation agreement is not to increase tax revenue for the government, but to foster economic development. Governments, businesses and civilians will all benefit from the agreement, Chang said.

By avoiding double taxation, the agreement will help to lower prices of goods and services, and add incentives for foreign investment, Chang said. In regards to legislators’ inquiries about the details in the pact, Chang said that since the agreement is not yet signed, all the details of the pact are confidential. He disclosed, however, that the pact encompasses only personal income taxes and corporate business taxes.