icantly reduce the corporate income tax rate in order to improve the country's business environment. According to CEPD Chairwoman Ho Mei-yueh,the council is considering cutting the tax rate from the current 25 percent to a level that is lower than Hong Kong's 17.5 percent.
Ho said the reduction plan is part of the taxation reform set to be launched by the government this year, with the goal of decreasing tax liability and simplifying administration to create a more favorable business environment. Ho said the CEPD is planning to make the new tax rate applicable to all businesses to bring an end to the complicated taxation system currently in practice in the country, in which the variety of tax waivers available as investment incentives for various situations are confusing businesses and causing them a lot of trouble.
With the plan receiving wide-ranging support when it was raised for discussion during a meeting with domestic business leaders earlier the same day, Ho said the Cabinet will further draft a law based on the proposal and send it to a taxation reform committee for review.
The Cabinet hopes the bill will be passed by the Legislative Yuan by the end of 2009, when the Statue for Upgrading Industries is set to expire, she said.
Meanwhile, on a proposal by the business sector to scrap the commodity tax, Ho said that if the commodity tax is to be abolished, the government will have to impose a new tax to make up for the loss of revenue.
According to Ho, the CEPD is considering levying an energy tax but thinks it is not the right time to discuss the issue now in light of the recent increases in energy prices.
