Taiwan premier says government will not kowtow to tycoon tax threats

Hon Hai Group Chairman Terry Gou (above) has threatened that his company would stop paying taxes if its subsidiary, Ambit, was not allowed to use equipment from China-based Huawei to operate its 4G telecom services.

TAIPEI - Premier Jiang Yi-huah yesterday stressed that government policies will not be dictated by threats from the mob or private business. Jiang said the government will never bow to threats by any companies, social movements, or politicians who make their demands by saying "this has to be done, or we will do so and so."

He was responding to Legislator Chiu Chi-wei's question about Hon Hai Group Chairman Terry Gou's threat that the company would stop paying taxes if its subsidiary, Ambit, was not allowed to use equipment from China-based Huawei to operate its fourth-generation (4G) telecom services.

"The government will not accept demands made in such a manner," said Jiang during a interpellation session with lawmakers. "We need to follow the legal procedures."

Gou made the threats after the National Communications Commission (NCC) cited security concerns when rejecting Ambit's application to use Huawei equipment for its fourth-generation (4G) telecom services.

Legislator Chiu from the main opposition Democratic Progressive Party wanted to know whether the government would bow to pressure from such a big business group.

Jiang's remarks apparently could also apply to the recent student-led Sunflower Movement attempting to block the Cross-strait Trade in Services Agreement.

NCC Chairman Shih Shih-hao claimed Gou had misunderstandings about the application, saying his commission had already sent Gou a letter explaining the situation.

Shih told lawmakers during the same session that Ambit submitted an application to build its system on March 6, but it withdrew the application on March 12 and then submitted a new one.

Because of the resubmission of the application, the process handling Ambit's case is more complicated, Shih said.

But Shih stressed that there has been no delay in the NCC's handling of any of the 4G licensees' applications. There are six 4G licenses in Taiwan.

Shih said three of the licensees have already completed relevant paperwork and will start commercial operations soon.

During the interpellation session, the premier declined to comment on New Taipei Mayor Eric Chu's calls for introducing measures to make companies raise salaries for their employees.

Chu said firms could be made to pay extra taxes if they failed to share their profits with the employees.

Jiang said the government is open to any opinions.