It was a slap in the Taiwanese government’s face when negotiations on a cross-strait mechanism to avoid double taxation broke down at the last minute on Monday.
However, it should be a precious lesson for President Ma Ying-jeou’s (馬英九) administration: Haste makes waste.
The delay is good news for the public and more than 1 million China-based Taiwanese businesspeople, who can now avoid the harmful consequences of a hastily signed pact. Nevertheless, the way the Ma administration handled the talks is worrying and raises more concerns about the planned economic cooperation framework agreement (ECFA).
Citing confidentiality, Minister of Finance Lee Sush-der (李述德) refused to specify what “unexpected technical issues” caused the negotiations to fail, saying only that they were related to tax items, tax rates and the definition of residence.
Aside from the tax rates, some of these “technical issues” are basic terms that should have been addressed in the first few negotiation sessions.
Lee should have known this better than anyone else. Why, then, did the ministry wait until the last minute and allow the “technical issues” to get in the way?
Meanwhile, Straits Exchange Foundation (SEF) Secretary-General Kao Koong-lian (高孔廉) offered the excuse that the two sides had only begun negotiations on double taxation in October, and that the issue remained complicated.
The government has signed bilateral tax exemption agreements with 16 countries since 1981, but the negotiations for each of those took between one and four years to complete, he said.
Again, Kao and Lee should have known this better than anyone else. So why did they believe they could wrap up a tax deal with China in less than three months when officials knew it would be far more complicated than the agreements Taiwan has signed with 16 other countries?
What’s the hurry?
None of these questions will be answered since Lee made it clear that “he cannot reveal too much information” because the two governments are still in the process of negotiating.
This raises another question: Why the secrecy?
This secrecy is not in line with how Taiwan has handled previous tax proposals.
In the past, Taiwan included the private sector in the policymaking process by creating a tax reform committee, whose authority often transcended that of the finance ministry.
The committee reviewed many versions of tax rate proposals and the media accordingly informed the public. The proposals were thoroughly discussed before the committee and the government sought a consensus. After all, a balance must be struck between the government and the taxpayer.
This time around, however, the finance ministry is keeping the public in the dark, trying to single-handedly pull off a deal with China.
This will only end up triggering more opposition, not only to a taxation agreement with China, but also to other agreements such as an ECFA.
Concerns that the US might abandon Taiwan are often overstated. While US President Donald Trump’s handling of Ukraine raised unease in Taiwan, it is crucial to recognize that Taiwan is not Ukraine. Under Trump, the US views Ukraine largely as a European problem, whereas the Indo-Pacific region remains its primary geopolitical focus. Taipei holds immense strategic value for Washington and is unlikely to be treated as a bargaining chip in US-China relations. Trump’s vision of “making America great again” would be directly undermined by any move to abandon Taiwan. Despite the rhetoric of “America First,” the Trump administration understands the necessity of
US President Donald Trump’s challenge to domestic American economic-political priorities, and abroad to the global balance of power, are not a threat to the security of Taiwan. Trump’s success can go far to contain the real threat — the Chinese Communist Party’s (CCP) surge to hegemony — while offering expanded defensive opportunities for Taiwan. In a stunning affirmation of the CCP policy of “forceful reunification,” an obscene euphemism for the invasion of Taiwan and the destruction of its democracy, on March 13, 2024, the People’s Liberation Army’s (PLA) used Chinese social media platforms to show the first-time linkage of three new
If you had a vision of the future where China did not dominate the global car industry, you can kiss those dreams goodbye. That is because US President Donald Trump’s promised 25 percent tariff on auto imports takes an ax to the only bits of the emerging electric vehicle (EV) supply chain that are not already dominated by Beijing. The biggest losers when the levies take effect this week would be Japan and South Korea. They account for one-third of the cars imported into the US, and as much as two-thirds of those imported from outside North America. (Mexico and Canada, while
I have heard people equate the government’s stance on resisting forced unification with China or the conditional reinstatement of the military court system with the rise of the Nazis before World War II. The comparison is absurd. There is no meaningful parallel between the government and Nazi Germany, nor does such a mindset exist within the general public in Taiwan. It is important to remember that the German public bore some responsibility for the horrors of the Holocaust. Post-World War II Germany’s transitional justice efforts were rooted in a national reckoning and introspection. Many Jews were sent to concentration camps not