Executive Yuan Extends Tariff Reductions on Key Raw Materials to Ease Costs

Vice Premier Cheng Li-chun chaired a meeting of the Stabilization of Prices Panel today to conduct a comprehensive assessment of the various current economic variables and fluctuations in the prices of people's livelihood goods in Taiwan. Following in-depth discussions and comprehensive consideration by the participating ministries and councils, the meeting officially finalized the decision to extend the current tax reduction measures on key raw materials for another six months, through the end of March 2026. The primary objective of this policy is to continuously and directly alleviate the operational costs of related domestic industries from the source, thereby stabilizing the prices of various raw materials required for domestic production and consumer goods, and preventing excessive shocks to the domestic economy from fluctuations in international raw material markets.

Reviewing the background of this wave of tax reduction measures on key raw materials, it is primarily rooted in recent years of continuous global geopolitical conflicts, supply chain restructuring, and drastic shocks to international energy and raw material prices, which have led to heavy domestic imported inflation pressures. To suppress prices and care for the people's livelihood, the government has previously repeatedly implemented tax incentives such as reducing or exempting business tax, customs duties, and commodity taxes on imported bulk commodities. These measures cover tax burdens on important livelihood grains such as soybeans, wheat, and corn, as well as key items including gasoline, diesel, cement, beef, and powdered milk. Through the government's proactive tax concessions and reductions, the dual effect of stabilizing domestic prices and easing cost pressures on the industrial sector has been substantially achieved.

The Executive Yuan's finalization of the tax reduction extension through the end of March 2026 not only demonstrates the government's firm determination to continuously pay attention to the people's livelihood and stabilize prices, but also provides the domestic industrial sector with a relatively clear and stable policy expectation. For domestic food processing, manufacturing industries, and related small and medium-sized enterprises, raw material costs account for a considerable proportion of operational costs. The continuation of tax reductions is effectively an umbrella provided by the government to businesses in a difficult economic environment. This helps enterprises maintain sufficient financial space to sustain production capacity and price stability when facing uncertainties in international market, thereby safeguarding the basic living expenses of domestic consumers from excessive escalation.

In addition to extending the tax reductions on key raw materials, Cheng Li-chun also put forward forward-looking strategic instructions during the meeting regarding future energy supply and price stability. Considering the ever-changing global energy market and the extreme weather risks brought by climate change, she specifically instructed relevant ministries to initiate the import procurement and dispatch planning for oil and gas for the first quarter of next year ahead of schedule. This pre-deployment initiative aims to strengthen Taiwan's overall energy supply resilience, ensure that domestic power generation, industrial production, and livelihood gas supplies remain secure, and fundamentally prevent the cascading inflationary effects that may be brought about by energy price fluctuations.

Overall, this series of decisions made by the Executive Yuan through the Stabilization of Prices Panel meeting balances short-term livelihood relief with medium- and long-term economic security. The continuation of source-based tax reductions directly builds a breakwater for industries and consumers, while the advance planning of imported oil and gas procurement proceeds from the height of national security and energy resilience to provide a solid foundation for Taiwan's continued economic operation. At a time when domestic and international economic situations remain challenging, the government has demonstrated the governance efficacy of actively responding to inflation and stabilizing public sentiment through cross-ministerial coordination and precise policy tools.