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Relief package 4.0 plus quintuple stimulus vouchers

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On May 19, 2021, Taiwan raised the national COVID alert to Level 3. Tightened epidemic prevention restrictions hit many domestic demand-oriented industries. A second round of amendments to the Special Act for Prevention, Relief and Revitalization Measures for Severe Pneumonia with Novel Pathogens were subsequently promulgated on May 31, which boosted the special budget cap for the COVID-19 response to NT$840 billion (US$30.3 billion). Taiwan's COVID-19 relief special budget was increased a third time in June by NT$259.5 billion (US$9.4 billion) to fund a "relief package 4.0" aimed at minimizing the impact on people and businesses. Now that the domestic transmission of the disease has been brought under stable control, the government has initiated a fourth increase to the special budget, adding NT$160 billion (US$5.8 billion) to fund "quintuple stimulus vouchers," which will help encourage spending and boost domestic demand.

Key measures of the relief package 4.0

■ Accelerating relief for individuals: In addition to administering aid in accordance with last year's standards, a subsidy is available for families with students enrolled in elementary school and below, as well as disabled students in junior and senior high school and the first three years of five-year junior colleges. Living allowances are also going out to children, young people, the elderly and the disabled in low to middle-low income households. Excluding those above a certain income, agricultural and fisheries workers, the self-employed, and workers without fixed employers also receive living allowances.

Also eligible for payments are workers without labor insurance, casual and part-time employees, full-time employees whose wages were impacted between May and July, workers aged 65 or older, and middle-aged to elderly workers who collect social insurance pension payments, small shopkeepers, self-employed and freelance art and culture workers, taxi and tour bus drivers, tour guides and tour group leaders, foreign permanent residents, short-term course instructors, and hourly workers.

Strengthening support for industry: Depending on circumstances, one-time operating subsidies and one-time employee payments are available to new target industries including commercial services, tourism, transportation, driving instruction, educational enterprises, the sports industry and affected personnel, arts and culture businesses, and care services. As for social welfare organizations, transportation businesses and bus companies that received money last year, additional assistance may be available this year as conditions dictate.

Furthermore, subsidies to help cover basic operating costs for airport commercial services and facilities companies have been raised to 40 percent. Passenger rental car businesses are eligible for new one-year subsidies to cover disease prevention materials for short-term rental cars, while subsidies for the tour industry covering the cancellation of tour group trips have been extended. A flexible approach to the classification of startup enterprises for relief purposes has also been adopted, among other measures.

Increasing the amount of bank loans available: COVID relief loans are administered through a number of programs, including worker relief loans, small and medium-sized enterprise (SME) relief loans (including health care and educational business), state-owned bank relief loans, agricultural relief loans, and central bank SME relief loans. Under relief 4.0, the amount of loans available has been raised by another NT$800 billion (US$28.6 billion) for a total of NT$4.25 trillion (US$151.8 billion) since the first wave of loans began going out. Preferential interest rates for policy borrowing are also available.

Relief financing assistance for startups has been newly expanded, and individual and groups that borrow to establish cram schools, after-school care centers, and preschools are eligible for new interest rate subsidies.

Reducing burdens: These measures aim to lighten the load for the general public. On the power front, summer electricity rates were suspended for residential customers in June, and only were applied to electricity usage after the first 1,000 kilowatt-hours of use in July. Summer rates were completely waived for disadvantaged care groups, vocational craft centers for the mentally handicapped, social welfare organizations, nursing centers and households equipped to care for physically handicapped family members. Service businesses and agricultural customers also received discounts based on reductions in revenue. Tenants in state-owned enterprise residential units and on non-public-use, state-owned land have been granted 20 percent rent reductions until June 2022. Finally, natural gas rates for passenger rental car businesses have been cut by half from July through September.

Quintuple stimulus vouchers

Each eligible individual can receive NT$5,000 (US$180) worth of vouchers in digital or paper form. To incentivize the use of the digital vouchers, more options are on offer for registering and pooling the voucher money to credit card accounts and using e-payment tools. Subsidies will also be available for small businesses to purchase electronic payment systems, and special QR codes will be designed for businesses to identify users of digital vouchers. Government ministries will also be rolling out their own eight additional types of vouchers. These measures will make the overall scheme accessible, easy to use and beneficial for the economy.

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