Taipei  - Taiwan stocks finished 3 per cent lower Tuesday as uncertainties over the island's and the global economy dampened investor sentiment, dealers said.

The benchmark Taiex index dropped 134.62 points, or 3.03 per cent, to close at 4,305.18.

Taiex opened sharply lower in reaction to Wall Street's overnight fall, caused by US banking giant Citigroup's announcement of massive lay-offs.

Its sliding trend eased somewhat late in the session amid hopes that a government plan to issue purchase vouchers could help stimulate domestic consumption, dealers said.

The vouchers, worth 3,600 Taiwan dollars (109 US dollars) each, are to be issued to every citizen to be used for their personal shopping.

Premier Liu Chao-shiuan announced before the market closed that the government plans to allocate 82 billion Taiwan dollars to issue the vouchers.

The move was expected to raise Taiwan's GDP by 0.64 percentage points, Liu said.

In August, the government lowered its forecast for Taiwan's 2008 economic growth from 4.78 to 4.3 per cent as the world faces a global economic crisis and Taiwan sees its exports fall as its overseas customers cut back on their spending. (dpa)