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MOF Perpetuates Tax Rebate System

2011/03/23 | By Philip Liu

Taipei, March 23, 2011 (CENS)--The Ministry of Finance (MOF) announced yesterday (March 22) that exporters will be entitled to permanent tax rebates for their materials starting March 30, a move which will especially benefit such lines as auto, textile, electronic and electric-machinery components and parts, and transportation equipment.

The move will perpetuate the tax-rebate system for all exported products, which was resumed on March 30, 2009 to help exporters cope with the impact of the global financial tsunami. Previously, the preferential treatment was canceled for tax rebates valued less than 1% of the FOB (free on board) prices of exported products in August 1983, for the sake of high administrative cost.

As a result, in the future exporters will be entitled to tax rebates for materials, whatever their values or share in the FOB prices of exported products. The measure will especially benefit lines featuring high-valued export products but massive amount of low-valued imported components and parts, such as autos, transportation equipment, electronics, electrical machinery, and textile.

There had been 21,950 cases of tax rebates over the past two years as of March 20 this year, amounting to NT$219 million in value, for exports topping NT$42.6 billion.

The Department of Customs Administration, under the MOF, reported that tax rebates valued at less than 1% of the FOB prices of exported products account for only 20.23% of total cases and 6.33% of total value. However, their exported products account for 30% of the total exports. Despite their small value, the provision of tax rebates for those exported products is still conducive to the enhancement of their export competitiveness.