Cabinet approves measures to encourage SMEs to raise wage

Taipei, Nov. 7 (CNA) The Executive Yuan, Taiwan's Cabinet, on Thursday approved a plan to provide incentives to encourage small and medium-sized enterprises (SMEs) to increase the wages of their employees.

Hoping to drive the growth of domestic salary levels, the government launched a plan to provide additional credit guarantees to small and medium-sized enterprises through the Small and Medium Enterprise Credit Guarantee Fund of Taiwan (Taiwan SMEG).

Under the plan, an additional guarantee of NT$35 million (US$1.09 million) in financing will be provided to SMEs that increase salaries, with guarantee percentages as high as 95 percent. The service fees charged by Taiwan SMEG will be as low as 0.1 percent, according to a statement issued by the Cabinet later Thursday.

Taiwan SMEG is a non-profit legal entity under the Ministry of Economic Affairs. Any guarantee-eligible SME can access Taiwan SMEG through banks.

As part of a program to promote the development of Taiwan's micro, small and medium-sized enterprises (MSMEs), the government will also provide preferential loans and favorable tax rates to MSMEs with fewer than 30 employees and help them undergo digital transformation to boost competitiveness.

In addition, NT$100,000 in subsidies will be given to businesses with fewer than 30 employees to help reduce the impact of the increase in monthly minimum wage and help them with digital skills training for employees to boost productivity, the Cabinet said in the statement.

The government will also increase subsidies to enterprises that see revenue increase and give pay raises, with this measure expected to benefit more than 600,000 companies, according to the statement.