March 11, 2008

Taiwan grants 1 year vat exemption for grain imports

Taiwan announced that it would exempt some agricultural products, including corn, soy and wheat, from value-added taxes (VAT) for a year in a move to curb inflation.

The finance ministry said Monday that weather in various parts of the world has become erratic due to global warming and that has caused a reduction in output of agricultural products.

Supply shortage talks have boosted prices of global commodities and in turn stoked inflationary pressures in Taiwan.

The government scraps the 5-percent VAT for one year effective Monday for farm products which include wheat, corn and soy.

Domestic oil price rises have been halted and the Taiwan dollar has been allowed to strengthen gradually to control imported inflation.

In February, the ministry said it would extend reduced tariff rates on several farm products, including wheat and wheat flour, by another six months through early August.

Taiwan posted an inflation rate of 3.9 percent last month, the highest since November.