At a Cabinet meeting on January 10, 2019, Premier Lai Ching-te received a briefing on the National Development Council’s strategy for stimulating domestic demand amid expected shifts in the overall economy in 2019.
To pursue inclusive and sustainable economic growth, the government will focus tax cuts on the working class, provide financing assistance primarily for small and medium-sized enterprises (SMEs), and offer consumer subsidies to encourage the purchase of energy-saving products. The premier said these efforts will also help advance the United Nation’s Sustainable Development Goals. He instructed government agencies to adopt a bolder, more farsighted and proactive approach when implementing the strategy, and conduct rolling reviews at irregular intervals to ensure each consumption and investment measure yields the maximum possible benefits.
As the trade conflict between the U.S. and China, together with other global economic changes, continue into this year, domestic demand will be the key stabilizing factor for Taiwan’s economy. The premier pointed to consumption and investment in particular as two main drivers of domestic demand.
To encourage consumption, the government will optimize the tax system, alleviate people’s burdens and raise disposable incomes. Other measures include promoting travels within Taiwan, organizing large-scale events such as conferences and exhibitions, and offering purchase subsidies for energy-saving equipment and electric vehicles. These policies will guide and provide the public with a wide range of consumer choices, the premier said.
As for investment, the government will oversee public infrastructure projects worth NT$392.7 billion (US$12.7 billion) this year, or 7.7 percent higher than in 2018. Agencies should vigorously promote the projects and raise the infrastructure budget execution rate in order to stimulate private-sector investment and provide the economy with a greater boost.
To spur private investment, this year’s efforts will focus on encouraging more investments by SMEs, building the momentum of the “five plus two” innovative industries plan, and bringing overseas Taiwanese businesses and investment dollars back home. The Executive Yuan will also push other initiatives including tax reform, amendments to allow investment tax credits, and legislation on the repatriation of offshore capital.