Taiwan’s stimulus plan

The government hopes to boost consumer spending by giving citizens cash as part of the economic stimulus plan.

Tax revenue of global tech powerhouse Taiwan — think semiconductor chips! — hit a new high in 2022, exceeding the budgeted amount by NT$495 billion ($16.3 billion).

To ensure that the benefits of economic growth are shared by all, the Taiwan government will hand out nearly $200 to every citizen and eligible foreign national, i.e. those with permanent residency and resident spouses of Taiwanese nationals. People can choose to receive the NT$6,000 cash via an online platform, at ATMs or at post offices.

The export-reliant economy’s growth rate reached 6.45 percent in 2021, the fastest since the economy expanded 10.25 percent in 2010.

However, Taiwan’s economic outlook is weakening amid slowing trade growth and tepid private spending, and the GDP growth is expected to slow down this year from 2.4 percent in 2022.

The government hopes to boost consumer spending by giving citizens cash as part of the economic stimulus plan.

The tax surplus will also be used to replenish the National Health Insurance fund and the Labor Insurance Fund, as well as subsidize housing policies, public transport costs, social-welfare policies, the upgrade of small and medium-sized enterprises, and the operations of state-run Taiwan Power Co.

While universal cash payment is not common around the world, countries have come up with their own measures to subsidize the low-income population as global inflation soars.

The Japanese government decided last year to distribute 50,000 yen ($366) to each low-income household to mitigate accelerating inflation.

In China, the Beijing city government plans to give out a $6 monthly cash subsidy to low-income residents to cushion the impact of rising food prices.

With regard to the current economic situation and people’s livelihood, Hong Kong also declares to issue consumption vouchers totaling HK$5,000 (US$637) to all eligible residents.

In the Philippines, among other measures, the government declared that the amount of P4 billion has been allotted to provide fuel assistance to transport workers and farmers in 2023.

Although Taiwan is giving out cash to citizens for the first time, the government has distributed consumption vouchers and stimulus vouchers several times.

During the 2008 global financial crisis, many companies in Taiwan cut pay and work hours of their employees or forced workers to take leave without pay to reduce costs. Consumers were hesitant to spend due to financial uncertainty. The government issued consumption vouchers worth nearly $120 to encourage people to spend more.

During the pandemic, Taiwanese government also issued triple and quintuple stimulus vouchers in 2020 and 2021.

The quintuple stimulus vouchers didn’t require consumers to spend before getting them, and the vouchers could be used in food stalls, night markets, hotels, transportation and online shopping websites in Taiwan.

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