Taiwan Announces Tax Incentives to Keep High-Tech Companies

TAIPEI —  Taiwan will offer a five-year tax break to high-technology companies to upgrade the island’s industry and deter major corporations from moving abroad, newspapers reported Sunday.

Investments in industries such as aerospace, advanced materials, semiconductors and pollution control will be exempt from corporate income tax for five years, Finance Minister Pai Pei-ying was quoted as saying.

The government is preparing a list of industries covered by the incentive, he said, adding that the exemption would not hurt government finances as it would be offered selectively.

Pai said the incentive was necessary to encourage companies, including foreign joint venture partners, to maintain operations in Taiwan rather than move them to countries with lower labor and land costs, such as China.

New foreign investment in Taiwan plunged 29% from a year earlier to $1.18 billion in the first 11 months of 1992, partly because rapidly rising wages are making investment less attractive.