Taiwan to put $12b excess revenue back into economy

Country is preparing for incoming global financial shocks

TAIPEI:

Taiwan will plough an extra T$380 billion ($12.43 billion) in tax revenues back into the economy in 2023 to help protect the island from global economic shocks, including subsidies for electricity prices, President Tsai Ingwen said on Saturday.

While the export-dependent economy grew 6.45% in 2021, the fastest rate since it expanded 10.25% in 2010, it is expected to grow much more slowly in 2022 and 2023, hit by Covid-19 turmoil in China, global inflation woes and the impact of the war in Ukraine.

Tsai, in a statement from her office following a meeting of senior economic officials, said the government must make preparations in advance for the "more severe challenges" the global economy faces in 2023.

The estimated T$380 billion in excess tax revenues for the central government in 2022 will be spent on areas including subsidies for electricity prices, labour and health insurance, and other spending to cope with the impact of global inflation and international economic challenges, the president said.

Government departments will also carry out a review of future industrial development strategies, “especially the adjustment of the role and layout of the semiconductor industry and the information and communications industry in the global supply chain,” Tsai said.

This will help consolidate Taiwan's key role in the global supply chain.