This is only a promotional item. It costs little, but gets lots of publicity for Taiwan. That can’t be bad.
As for tax rates in Taiwan, they are relatively low for the developed world. And there are a lot more services for locals than for tourists (true in any country) paid or partly paid for by the government (hospital care, education…).
Tourists do need to be courted. Taiwan has the opportunity to be a world class tourist destination, yet barely makes an indentation or a scratch on the total tourist pie. It provides all sorts of benefits for Taiwan… if more tourists come (not just Chinese): tax revenues, jobs, construction, diplomatic benefits, educational opportunities, investment, … none of these is to be sneezed at.
These are things that most other countries take for granted. But Taiwan can’t, because of its unusual political & historical situation. And so, with tourist arrivals below even South Africa’s or UAE’s levels, there are MASSIVE opportunities for development.
http://www.telegraph.co.uk/travel/travelnews/10113059/Taiwan-offers-free-Wi-Fi-to-all-tourists.html
It’s a pity that the knee jerk reactions of both independence & PRC supporters completely missed the point of this story.