Taiwan’s Unheralded COVID-19 Financial Response

To relieve the economic impact caused by COVID-19, Taiwan’s Executive Yuan last month promoted an overall bailout package to help people in all walks of life get through difficulties caused by the pandemic.

Faced with the side-effects of the coronavirus, many firms have been forced to halt production lines, and have had difficulties dealing with financial issues on their own.

Ministry of Labor efforts

As a result, in mid-April the Ministry of Labor (MoL) amended the thresholds for applicants to claim benefits to ensure that workers could maintain a basic but acceptable standard of living for themselves and their families at this time.

It also introduced a low-interest loan program with a maximum amount of NT$100,000, able to be paid back over three years – an option available to anyone working but affected by the pandemic, even those lacking basic labor insurance.

These policies are similar in form to those introduced by the UK well over a month ago to help avoid sudden layoffs.

Furloughed by any other name

The Ministry of Economic Affairs has also started to offer subsidized salary options, and operational outlay contingency plans.

Companies suffering a 50% reduction in income when compared to the same period over the past two years qualify to apply for this compensation.

At the individual level, each employee is allowed to apply for 40% of their wages up to a limit of NT$20,000 per month.

As for the enterprise itself, each company will qualify to receive a one-off payment based on the number of personnel employed.

There are also additional policies in place to allow a deferment on the paying of taxes including income and licensing tax, as well as options on reduced rates of credit(s).

The government has already approved a budget of NT $1.05 trillion to a help those companies and individuals in need, to help them weather the COVID-19 storm.