Gov't vows to make enterprises more profitable
May 25, 2014, 12:00 am TWN
TAIPEI, Taiwan -- A top economic official said Saturday that the government is determined to provide necessary assistance to local enterprises in a bid to help them strengthen their bottom lines.
Minister of Economic Affairs Chang Chia-juch said after the Legislative Yuan approved an amendment to the Act For Development of Small and Medium-sized Enterprises earlier in the week that local companies are expected to enjoy higher tax deductions resulting from their expenditure in research and development.
The revised law will also give tax incentives to employers who hire more employees, Chang said.
Chang said that with the market growing more upbeat with regard to the local economy, the government will come up with more measures to push for law revisions to allow enterprises to generate more profits.
On Friday, the Directorate General of Budget, Accounting and Statistics upwardly revised its forecast of Taiwan's 2014 gross domestic product growth for 2014 to 2.98 percent from an earlier estimate of 2.82 percent, citing stronger private consumption and investment.
Despite the upgrade of Taiwan's GDP growth by the DGBAS, the Chung-Hua Institution for Economic Research said that given the relatively strong consumption and investment, the government estimate remains conservative.
The think tank said Taiwan's economy could rise 3.03 percent this year.
According to the Financial Supervisory Commission, in the first quarter of this year, listed companies on the main board and on the over-the-counter market generated NT$6.5 trillion (US$215 billion) in sales, up 4.4 percent from a year earlier, while their net profit grew 9.8 percent to NT$379.5 billion.
Chang said that as long as employers become more profitable, it is more likely for companies to raise wages for their employees who have long complained of low compensation, compared with their counterparts in neighboring countries, in particular South Korea.
With signs of a growing economy, Chang said, the government will not only be satisfied with a falling jobless rate, but will encourage employers to raise wages for their employees.
In April, Taiwan's jobless rate fell to an almost six-year low of 3.91 percent. It was the first time the unemployment rate had fallen below the 4 percent mark since June 2008.
In March, The MOEA met representatives from 22 major local companies and asked them whether they planned to give raises to their employees.
According to the MOEA, the 22 companies, including Formosa Plastics Corp., Nan Ya Plastics Corp., IC packaging and testing services provider Advanced Semiconductor Engineering Inc., and tire maker Kenda Rubber Industrial Co., have promised to raise wages by 3-5 percent, starting from the first half of this year.