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COVID relief and stimulus for industry

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Following the emergence of the novel coronavirus in the Chinese city of Wuhan in late 2019, Taiwan quickly established the Central Epidemic Command Center on January 20, 2020 to coordinate disease prevention and response measures at the national level. As the virus spread, it dealt heavy blows to many industries and businesses in its path. Taiwan's government responded quickly with a three-pronged plan of disease prevention, industrial relief and economic stimulus: Disease prevention includes strict border controls together with local prevention and mitigation strategies. For industries and businesses hit by the outbreak, the government has rolled out relief programs—regardless of industry—with the aims of distributing benefits equally, achieving immediate results, strengthening industrial foundations, and accelerating public works projects.

Taiwan also promulgated the Special Act for Prevention, Relief and Revitalization Measures for Severe Pneumonia with Novel Pathogens on February 25, 2020, authorizing an initial special budget of NT$60 billion (US$2 billion). This special budget was expanded by NT$150 billion (US$5.1 billion) via amendment of the act on April 21. As the pandemic grew worse and global economic growth weakened further, Taiwan increased the budget again by an additional NT$209.947 billion (NT$7.1 billion) in October. Covering everyone from families and disadvantaged groups to companies and industries, the package provides such support as individual tax breaks and household expense subsidies, as well as relief, stimulus and tax cuts for businesses and industry. Also included are a full range of preparatory measures targeting epidemic control and amelioration, from follow-on prevention and treatment to the purchase and development of vaccines.

Three types of relief

Financial aid: An allowance has been established to provide guarantees on up to NT$750 billion (US$26.4 billion) in financing for businesses, medical organizations, educational institutions and workers facing COVID-19 disruptions. For similarly affected small and medium-sized enterprises, interest subsidies are available for existing loan repayment extensions, borrowing to cover salaries and rent, and loans to fund stimulus-driven capital expenditures and cash-flow requirements.

Employment assistance: To help employees, subsidies are available to supplement salaries for furloughed or short-time workers and to encourage them to undergo training while on leave. Workers who lose jobs during the outbreak will receive the usual unemployment payments, and companies hiring these workers will receive compensation. As for employers, government assistance will go mainly toward stabilizing employment relations. Priority assistance will be given to affected SMEs and high-risk manufacturers for health and safety-focused facility and equipment upgrades during the pandemic. Subsidies have also been expanded to encourage companies to promote a healthier work-life balance for employees.

Tax breaks: For hard-hit small proprietorships exempt from revenue reporting, tax authorities are lowering assessed sales and taxes, and full tax exemptions may be granted as appropriate. Assistance in applying for refunds of overpaid business taxes is also provided. Profit-seeking enterprises that lose business income due to COVID-19 can deduct the losses from taxable income, and deadlines have been eased to allow for temporary postponements and instalment payments. Tax breaks will be given to employers who pay employees during time off due to the coronavirus. Taxpayers receiving government-provided subsidies and allowances may exclude such assistance from taxable income.

Stimulus initiatives for industry

Industries serving domestic demand: Numerous stimulus measures have been introduced to encourage consumer spending and revitalize businesses that cater to domestic demand. These include "triple stimulus" vouchers covering a wide range of general goods and services, "Arts FUN Go" vouchers to boost arts and culture spending, coupons aimed at sports and fitness-related purchases, agritourism e-tickets, and Hakka E-coupons to spur purchases in designated Hakka communities. The government also initiated subsidies to expo and tourism enterprises.

Manufacturing industry: On-demand technical guidance and solutions assistance for companies facing pressing technical bottlenecks are available, while traditional industries and small and medium-sized enterprises can seek subsidies to support innovative research and development. For affected workers, there is dedicated vocational training designed to revamp skillsets and stabilize employment as the economy upgrades and transforms. Digital technologies are also being applied to improve marketing, expand sales and raise the international prominence of Taiwan's domestic manufacturers.

Additional stimulus: The government's promotion of three major investment incentive programs aimed at overseas and domestically based Taiwanese companies has succeeded in attracting over NT$1.1 trillion (US$38.7 billion) to investment projects in Taiwan. Public works projects have also been accelerated. Finally, responding to growing demand from businesses setting up in countries targeted by the New Southbound Policy, Taiwan is enhancing cooperation and coordination with these nations to speed the relocation of industry.

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