Taiwan Gov't to Cut Tariffs on 15 Auto-parts Categories

Taipei, Feb. 23, 2009 (CENS)--To help salvage the automotive industry, the Taiwan government is evaluating to cut the import tariffs on 15 auto-parts categories for a certain period, according to industry sources.

The Ministry of Economic Affairs (MOEA) recently proposed a list containing 15 auto-parts categories and suggested the government to cut by half their tariffs for one year. The Ministry of Finance (MOF) sided with the tariff cut but believed the period should be six months and then extended according to effect.

With a six-month tariff deduction, MOF said, the government would lose NT$800 million (US$23.5 million) in tax revenues, with any official decision made to be the first such measure to salvage the local automotive industry.

The 15 MOEA-suggested product categories include ignition parts for diesel engines over 3,000cc, shock-absorbers, exhaust systems and parts etc., which currently are levied at 15-25%.

The MOF pointed out that, except for such diesel engine ignition parts, all the other 14 categories can be locally made so the tariff cut might hurt the local auto-part industry. But the MOEA claimed that it has discussed the issue with the local parts sector to conclude that the impact would be minimal for the volume is too small.