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Government pledges to achieve balanced budget in 10 years

2012/05/13 18:19:20

Taipei, May 13 (CNA) The Finance Ministry announced plans on Sunday to reduce Taiwan's national debt and achieve a balanced budget in 10 years after the country's national debt per capita rose for the sixth consecutive month in April.

In a move to offset rising debt pressures in the country, the ministry said in a report submitted to a legislative committee that it plans to reduce the national deficit by NT$20 billion (US$680 million) to NT$40 billion per year while keeping expenditures at their current level.

Taiwan's national debt, which includes the central government's long-term and short-term debt, amounted to NT$5.225 trillion as of the end of last month, up from NT$5.1576 trillion the previous month, the ministry said.

Taiwan has run substantial deficits over the past three years to keep the economy growing in the aftermath of the 2008-2009 financial crisis.

The deficit totaled NT$439.6 billion, or 3.5 percent of gross domestic product (GDP) in 2009, NT$409.5 billion, or 3.0 percent of GDP, in 2010, and an estimated NT$345.9 billion, or 2.5 percent of GDP, in 2011, according to ministry data.

This year, the government has projected the deficit to fall to NT$230.8 billion, or 1.6 percent of GDP, in 2012.

Among the strategies called for in the ministry's plan will be to freeze annual spending at current levels, though it did not specify for how long, and pay off debt when surpluses exist.

The ministry also suggested leasing government premises that are currently idle or underused as a way of raising revenues and proposed allocating at least 7.5 percent of all tax revenues to paying down the principle on the country's debt, starting this year.

The announcement came ahead of a scheduled appearance Monday by Finance Minister Christina Liu (劉憶如) before a legislative committee on the government's plan to reduce the national debt.

The government's proposed capital gains tax on stock investments is also on the meeting's agenda.

(By Eva Feng and Ann Chen)