Taipei- Taiwan's cabinet on Thursday announced a 180-billion-Taiwan-dollar (5.6-billion-US-dollar) package aimed at stimulating the island's sagging economy and ailing stock market.

The package, introduced amid mounting criticism of the government of China-friendly President Ma Ying-jeou, included tax reforms, financial incentives for local industries, and measures to boost exports and investment, cabinet officials said.

"The major purpose of the package is to induce consumption, promote investment and infrastructure projects, and stabilize financial markets," said Chen Tian-jy, chairman of the Council for Economic Planning and Development, which charts the island's major economic policies.

Chen said the package was expected to secure economic growth this year at least at the government's earlier estimate of 4.3 per cent.

Other incentives in the package included five-year tax breaks on new investments by the manufacturing and technology sectors, 58.3 billion Taiwan dollars in spending on construction projects and 1.8 billion Taiwan dollars in interest subsidies for home buyers.

The package also includes a six-month cut in the securities transaction tax to 0.15 per cent from 0.3 per cent, which still needs to be approved by parliament, Chen said.

The benchmark Taiex stock index has lost more than 30 per cent of its value since the Ma government took office on May 20, prompting investors to hit out at Ma for failing to live up with his campaign promises to improve the economy.

Tens of thousands of protestors marched down Taipei's thoroughfares late last month and demonstrated in front of the Presidential Office to protest Ma's lack of progress in reviving the economy and easing inflation. (dpa)