A lower corporate income tax will encourage Taiwan businesses that maintain overseas operations to bring some of their capital home, "Premier" Wu Den-yih said Tuesday.

Speaking at press conference on a proposal by the ruling Kuomintang (KMT) legislative caucus to cut the corporate income tax rate from the current 20 percent to 17 percent, Wu said the tax reduction would remove one of the two major deterrents for overseas Taiwan entrepreneurs - known as taishang - to return.

The other obstacle is the cost of foreign labor, he said. Currently foreign laborers are paid in line with the country's minimum wage of NT$17,280 per month, as stipulated by law.

Wu said that if the non-Taiwanese laborer wage issue can be addressed, for example, by lowering wages to reflect actual take-home pay on par with the mainland and Southeast Asian countries, taishang will probably be more willing to invest in Taiwan.

Meanwhile, after extensive assessment and deliberation, the Executive Yuan has decided on the 17 percent corporate income tax rate and referred it to the Legislative Yuan for screening, Wu said.

China Daily/CNA

(HK Edition 04/14/2010 page3)