Washington-Taiwan has dropped two spots to rank No. 15 among 190 economies in the latest "Doing Business" rankings released Wednesday, due to a 2018 corporate income tax increase.
Taiwan received a score of 80.90 points, down 0.1 from a year earlier, when the country earned the No. 13 spot, according to the annual report released by the World Bank. Higher rankings in the report generally indicate simpler regulations for businesses and stronger protection of property rights.
In the Asia-Pacific region, Taiwan finished fourth, an improvement from fifth place last year, for ease of doing business, behind Singapore at No. 2, Hong Kong at No.3 and Malaysia at No. 12. China, meanwhile, ranked No. 31 in the survey.
The report focuses on 10 areas to assess a country's business environment: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, trading across borders, paying taxes, enforcing contracts and resolving insolvency.
Among the 10 criteria, Taiwan maintained the same ranking in two -- enforcing contracts (11), and resolving insolvency (23), while dropping in the other eight.
The lowest ranking Taiwan received is in the "getting credit" category, where it ranked 104th among the world's 190 economies with a score of 50 out of 100. The indicator evaluates an economy's strength of credit-reporting systems and the effectiveness of its collateral and bankruptcy laws in facilitating lending.
Asked to comment, Taiwan's National Development Council (NDC) explained that Taiwan's drop in the annual rankings was largely due to the fact that the survey saw the increased corporate tax as having a negative effect on doing business.
It was referring to the Legislative Yuan's passage and later enactment of tax reforms that increase corporate income tax from the previous 17 percent to 20 percent, while reducing individual income tax rates.
Regarding the low ranking in the "getting credit" category, the NDC indicated that some foreign companies have complained that Taiwan does not recognize the concept of a floating charge, making it harder for them to get loans.
Discussions on possibly amending the nation's Chattels Mortgage Transaction Act to introduce the floating charge system are underway, but no final decision has been made, it said in a press release.
A floating charge is a security interest over a group of non-constant assets that companies use as a means of securing loans.
Typically, a loan might be secured by fixed assets such as property or equipment, but with a floating charge, the underlying assets are usually current assets or short-term assets that can change in value.
Source: Focus Taiwan News Channel