Flowers and Thorns: Positive Implications of the Tax Agreement

Flowers and Thorns: Positive Implications of the Tax Agreement
United Daily News editorial (Taipei, Taiwan, ROC)
A Translation
December 23, 2009

The fourth Chiang/Chen Meeting concluded yesterday. The tax agreement previously signed was temporarily withdrawn. To quote Premier Wu Den-yih, optimists see the flowers, pessimists see the thorns. This is the first time a signed document has been withdrawn. Cross-Strait interaction involves thorns as well as flowers. Withdrawing the agreement means the signatories are in no hurry to pick the flowers, for fear of being pricked by the thorns. Both sides are being judicious. That has positive implications.
They may have had a day to let doubts settle. But many people are still confused about why the two sides called time out on the tax agreement. They are wondering what sort of problems arose.

Recent discussions addressed cooperation over agricultural inspections, quarantine procedures, labor affairs for the fishing industry, standards and measures, inspection certification, and cross-Strait tax agreements. They were all very specialized and technical in nature. The opposition DPP was unable to make any political hay out of them. That is why they deliberately turned their attention to ECFA. The two sides have spent years discussing the institutionalization of labor affairs for the fishing industry. Cross-Strait agricultural trade volume has expanded. Cooperation over quarantine and inspection procedures, the avoidance of double taxation, and certification standards require further agreements. These will dramatically change cross-Strait economic interaction. Once the pros and cons have been balanced, they will greatly increase Taiwan's efficiency vis a vis the outside world. This is something the opposition DPP should make every effort to monitor. It should make an effort to sharpen the focus of the debate, instead of hurling wild accusations.

Take the recent extension to the tax agreement for example. Taipei has signed 17 similar agreements with other nations. The main purpose was to avoid double taxation, to define taxation powers, and to reduce the tax burden on businesses and individuals who shuttle back and forth between Taiwan and the Mainland. It will help determine tax overhead, and promote mutual investments and development. This agreement applies only to direct investments. It will help businesses change their investment models. It will make cross-Strait investments more transparent. More importantly, it will induce multinational companies who wish to break into the Mainland market to use Taiwan as their operational base. It will be the key to restarting our plans for an Asia-Pacific operations center.

This agreement incorporates existing international rules. But it must also take into account the special historical ties between the two sides. Various forms of income tax directly affect the two governments' tax revenues, corporate tax planning, and any number of business activities. Therefore lop-sided tax provisions inconsistent with our interests must be avoided. If these issues are not made clear in advance, the government will find it difficult to bring them up later. They also highlight the difficulty of applying international statutes to cross-Strait economic and trade consultations. They involve disputes over sovereignty that the government may find difficult to talk about. Cross-Straits tax agreements are sensitive and complex. ECFA is even more so. With ECFA the uncertainties for both sides will be even greater. These are the thorns that bedevil cross-Strait relations. The fourth Chiang/Chen Meeting has inadvertently highlighted this fact, yet again.

That cross-Strait tax agreements have been halted during the final stages of negotiations may take us aback. It may lead to doubts about the pace of cross-Strait economic and trade normalization, It may even provoke concern that we have reached a critical impasse regarding sovereignty. But it also allows the public to see whether the Democratic Progressive Party is making an effort to oversee the government's policies, or merely shouting populist slogans. Is the DPP adopting a professional and rational approach to policy discourse? Is it promoting transparency in cross-Strait consultations in order to protect the public interest? The DPP has said nothing about the substance of the agreement. The Ma administration withdrew its support for the tax agreement on its own. This shows that the DPP prefers to whoop it up rather than act responsibly. It is derelict in its responsibility as an opposition party.

For the Ma Ying-jeou government, the extension of the cross-Strait tax agreement has been spun as a serendipitous result of the Chiang/Chen Meeting. It will be the focus of public attention. Two consultations have already taken place, in two locations. The participants' rank and numbers have accorded with formal reciprocity. The issues raised have accorded with substantive reciprocity. The withdrawal of the tax agreement has allowed the public to see cross-Strait negotiations very differently. Cross-Strait negotiations have turned out to be real negotiations, with the real possibility of failure. They have turned out to be more than pro forma rituals. The public now realizes that the government is in earnest about cross-Strait consultations, and that it has something to show for its efforts. The government knows that "all that glitters is not gold." The withdrawal of the tax agreement has inadvertently reminded the government that the institutionalization of cross-Strait consultations has advanced from the easy stage to the difficult stage. They have advanced from the mutually beneficial initial stage, to a quid pro quo, zero sum later stage. They may adversely affect the interests of certain groups. Some policies may provoke controversy. Public sensitivities are sure to increase. The way to defuse such sensitivities is to make policy debate more transparent. The government must have confidence in civil society.

The tax agreement has been withdrawn over terminology relating to sovereignty, or to technicalities. The Chiang/Chen Meeting has suffered a setback. But this setback will allow each side to better understand the others's position during future cross-Strait negotiations. It will allow them to pick the flowers without being pricked by the thorns.

花與刺：租稅協議撤簽的正面意義
【聯合報╱社論】
2009.12.23 03:11 am

第四次江陳會昨天閉幕，原訂簽署的兩岸租稅協議臨時撤簽。借用行政院長吳敦義的名言，樂觀的人看到花，悲觀的人看到刺；這個首次出現的撤簽動作顯示，兩岸互動確是有花也有刺。撤簽意謂不急於摘花，免得被刺螫傷；雙方的臨事慎重，具有正面意義。

即使經過一天的沉澱，很多民眾仍對兩岸租稅協議何以臨陣叫停一頭霧水，不知其間究竟出了什麼問題。

就議題本質而言，這次討論的農產品檢疫檢驗合作、漁業勞務合作及標準計量檢驗認證合作及兩岸租稅協議等，是非常專業且技術性的，以致在野黨抓不到攻擊的主靶，才會故意轉移焦點到ＥＣＦＡ；但在實質面，除漁業勞務合作是把兩岸討論多年的漁工問題制度化、農產品檢疫檢驗合作是兩岸農產貿易量擴大後的必要配套外，避免雙重課稅及標準認證合作等兩協議，都會大幅改變兩岸經貿互動的模式，利弊相抵後，更將為台灣帶來高度外部效益，這其實才是在野黨應盡力監督、加大社會討論力度的焦點，而不是亂打一通。

以這次延簽的兩岸租稅協議為例，我國已與十七個國家簽署類似協定，主要目的是避免雙重課稅、劃分課稅權，以降低往來兩地企業、個人的租稅負擔，有利確定租稅成本，並促進彼此的投資發展。此外，這項協議因僅適用於直接投資，亦將引導企業改變投資模式，有助兩岸投資監理的透明化；更重要的是，這可吸引有意進軍大陸市場的跨國企業，評估以台灣為營運基地，亦是台灣重啟亞太營運中心大計的關鍵。

不過，儘管這項協議已有國際規約可供參酌、比較及運用，但兩岸間的特殊歷史關係必須納入考慮；尤其是在各類所得課稅權的劃分上，直接攸關雙邊課稅利益、企業租稅規劃及由此延伸的各種經營行為等，自應避免因租稅傾斜而誘導不符我方利益的行為。然而，這些事前沒說清楚的，政府事後也諱莫如深，顯有難言之隱；亦凸顯兩岸經貿協商在准用於國際通用的規約上，仍有其一定的難度，而其難度或正是政府啟不了口的主權爭議。由兩岸租稅協議的轉折看敏感、複雜度更高的ＥＣＦＡ，兩岸簽署的不確定性顯然就更高了，這正是兩岸關係發展過程中的刺，江陳四會的意外再次凸顯了這一點。

然而，兩岸租稅協議在最後階段踩下煞車，固然一時令人錯愕，也難免引發兩岸經貿關係正常化政策節奏是否改變的疑慮，甚而擔心是否已走到難以跨越主權爭議這道鴻溝的臨界點；但於此同時，也讓社會看到了民進黨若能把對政府的監督放在實質的政策而非民粹式的口號，用專業、合理的政策論述推動兩岸協商的透明化，如此才能真正保護台灣利益。如今，民進黨對協議內容未置一辭，反而是由馬政府主動撤簽；這顯示民進黨只想「熱鬧」而不問「門道」，實在有虧於反對黨的職守。

對執政的馬英九政府而言，兩岸租稅協議的延簽，更是已被定型化、制式化的江陳會一個「美麗的意外」；它將社會的視聽焦點，從兩會協商在地點、與會人士層級、人數等「形式對等」，轉移至議題折衝的「實質對等」；也讓社會對兩岸協商可以有不同的觀感，原來它是真正的談判，有破局的可能，而非只是定期舉行的儀式；更讓民眾知道，原來政府在兩岸協商中亦可有守有為，而非撿到籃裡都是菜。這個意外更提醒政府，兩岸制度化協商「由易而難」的階段，難度已從雙方有利無害的初階，進階到雙方利益互換、甚而相爭的中階，因為有部分族群的利益可能受影響，其政策爭議性、社會敏感度勢必更大，而其化解之道正是加大政策論述的透明度，政府應對台灣的公民社會有信心。

租稅協議不論是因「主權用語」或「技術因素」而撤簽，雖是此次江陳會的挫折；但對未來的兩岸談判而言，應會使雙方更懂得準確拿捏分寸，摘花而不被刺所傷。