Taiwan Cabinet OKs 5-Year Tax Break For 3G Operators

TAIPEI -(Dow Jones)- Taiwan's Cabinet said Wednesday it had approved a proposal to waive sales tax on the island's third-generation mobile service providers for a five-year period.

The proposal will be sent to the Legislative Yuan in two weeks' time, a cabinet secretary said.

The proposal was made by the Ministry of Economic Affairs' Industrial Development Bureau.

The tax exemption is designed to encourage the development of 3G, which is still at an early stage on the island, the Cabinet said in a statement.

The proposal allows 3G operators to decide within two years of launching their services when to start receiving the tax benefits.

The Ministry of Transportation and Communications said it expects the island's 3G service providers to begin taking up the tax waiver around 2007.

Taiwan will have five 3G service providers by the end of this year.

Far EasTone Telecommunications Co. (4904.OT) launched its 3G service on July 13, joining non-listed Asia Pacific Telecom Group, which has been providing its service since July 2003.

Taiwan Mobile Co. (3045.TW) began offering a free trial-period for its 3G service in late May, and said it plans to start charging for the service in early August.

Chunghwa Telecom Co. (CHT) said it will launch its 3G service at the end of July, while new entrant VIBO Telecom Inc. said it will join the competition in the fourth quarter.

-By Alex Pevzner, Dow Jones Newswires; 8862-2502-2557; alex.pevzner@dowjones.com

-Edited by David Riordan

(END) Dow Jones Newswires"

Posted to the site on 20th July 2005