07/06/2011 (Focus Taiwan News Channel) - The Ministry of Finance decided Monday to put on hold a tax refund policy for companies affected by the widening food contamination scandal after facing harsh criticism from the general public.

The ministry said companies involved in the scandal will need to file for tax rebate applications but will not see any money until prosecutors and health regulators have clarified who should be held responsible for the scandal.

Originally, the ministry had said companies would be able to get refunds on commodity tax, sales tax and business income tax if their products are returned or destroyed upon being found to contain the banned toxic plasticizer DEHP.

However, the announcement sparked outrage among local consumers, who said it is they who are the victims of the scandal, not the companies.

However, the ministry said the tax refund measure will not particularly benefit these companies, because commodity tax and sales tax are levied only when products are sold.

As a result, companies are legally entitled to tax refunds if their products are returned by consumers and destroyed, it added.

Nevertheless, the ministry decided to postpone the measure until the results of the investigation into the scandal are unveiled.

Last month, DEHP-tainted clouding agents were found to be used by a local company that makes sports drinks and dietary supplements. Since then, the scandal has mushroomed to include hundreds of products such as juices, tea drinks, fruit jams and syrups, and dietary tablets and powders.

Clouding agents are common food additives used to make foods and beverages look more attractive to consumers. One of the ingredients is palm oil, which one local manufacturer substituted with cheaper but poisonous DEHP.