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Cross-strait tax pact not for witch-hunt, says SEF chief

TAIPEI, Taiwan -- Taiwanese residents running businesses in China should not be worried that the signing of a cross-strait taxation pact will lead to a witch-hunt for tax evaders, the head of the Straits Exchange Foundation (SEF) said yesterday.

Chairman Lin Join-sane was reported by the Central News Agency as saying that Taiwan and China are looking to sign a taxation pact to crack down on tax evasion, which could still be carried out without such an agreement.

Lin, leading an SEF delegation on a cross-strait mission, was speaking to the press during a visit to a bakery operated by Taiwan investors in Shanghai.

The SEF chief was in China together with Vice Finance Minister Sheu Yu-jer, meeting with Taiwanese businesspeople in a bid to convince them of the needs and benefits of signing a cross-strait taxation agreement.

The pair had just talked to representatives from the association for Shanghai-based Taiwanese businesses.

Such an agreement is expected to involve taxation information exchange between the two sides, causing Taiwanese businesspeople to worry that it could become a base for a witch-hunt for tax evaders.

Lin, whose SEF handles China ties on behalf of the Taiwan government, said the agreement will state clearly that it will not be enacted retrospectively, meaning it will not be applied to any tax-related activities before the signing.

The agreement will instead ease Taiwanese businesses' financial burden and encourage Chinese businesses to invest in Taiwan, he said.

Lin said details of the proposed agreement cannot be disclosed before the signing, but the government is eager to hear the opinions of Taiwanese businesses and seek a balance between the pros and cons, as well as support.

“The government will step up communication efforts before signing any agreements in the future,” Lin was cited by CNA as saying.

Taiwan has been looking to strike a series of deals with mainland China after both sides signed the Economic Cooperation Framework Agreement (ECFA).

The two sides have already signed a trade services agreement, but Taiwan's Legislature has yet to approve it because of blockage by opposition lawmakers.

Following the talk with the Taiwanese businesses, the SEF delegation later met with Chen Deming, Lin's counterpart from China's Association for Relations Across the Taiwan Straits (ARATS).

During the meeting, Lin pointed out that there have been different opinions from Taiwan's populace concerning the trade service pact.

Chen replied that China “totally respects Taiwan” on the issue, according to CNA.

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