Amid clashes between lawmakers from ruling and opposition parties, amendments on revenue allocations were approved by the legislature late on Friday night, allowing local governments to secure an additional NT$375.3 billion (US$11.5 billion) in funding from the central government.
It was the first time in more than 25 years that the Legislative Yuan had revised the Act Governing the Allocation of Government Revenues and Expenditures (財政收支劃分法).
Lawmakers of the opposition Chinese Nationalist Party (KMT), which proposed most of the passed amendments, and the Taiwan People’s Party (TPP) hope the new law would return more revenue to local governments to support their public work projects. Ruling Democratic Progressive Party (DPP) legislators, on the other hand, said the changes would squeeze the central government’s budget.
Photo: Liu Hsin-de, Taipei Times
Under the current practice, the central government is allocated 75 percent of the country’s total taxation or other revenue, while local governments are given 25 percent of available funding, compared with a 60 to 40 percent allocation ratio before 1999.
The amendments proposed by opposition lawmakers aimed to allow local governments to take back funds under the previous 60 to 40 percent allocation ratio.
Among the approved amendments, 11 percent of income tax revenue would be allocated to local governments, while business tax revenue after uniform invoice lottery prize payouts would be completely given to local governments.
Currently, 10 percent of income tax revenue and 40 percent of business tax revenue after deduction of uniform invoice prizes go to local governments.
The newly revised law also stipulates that land value increment tax belongs to special municipality and county and county-level city taxes, and that the growth in land value results from efforts made by local governments, so the tax revenue from it should completely go to local governments.
The change came in contrast to the current regulation, which allows the central government to allocate only 20 percent of land value increment tax revenue to local governments.
The KMT caucus expects the revised revenue allocation rules would help local governments to improve their financial conditions and tilt toward a balance between urban and rural areas around Taiwan.
The TPP caucus said the amendments are expected to allow local governments to secure more funding for their construction projects.
However, DPP caucus chief executive Rosalia Wu (吳思瑤) said the newly revised law was unlikely to deliver fair revenue allocation and would hurt Taiwan’s fiscal discipline.
In response to the passage of the amendments, the Ministry of Finance expressed concerns that the allocation of an additional NT$375.3 billion to local governments would create a severe adverse impact on the fiscal conditions of the central government and undermine the welfare of the entire country.
The ministry said that the new revenue allocations could affect the implementation of policies related to economic development, social welfare, national defense and social security.
It also accused the opposition parties of failing to have thorough discussions before pushing the amendments through the legislative floor.
‘DENIAL DEFENSE’: The US would increase its military presence with uncrewed ships, and submarines, while boosting defense in the Indo-Pacific, a Pete Hegseth memo said The US is reorienting its military strategy to focus primarily on deterring a potential Chinese invasion of Taiwan, a memo signed by US Secretary of Defense Pete Hegseth showed. The memo also called on Taiwan to increase its defense spending. The document, known as the “Interim National Defense Strategic Guidance,” was distributed this month and detailed the national defense plans of US President Donald Trump’s administration, an article in the Washington Post said on Saturday. It outlines how the US can prepare for a potential war with China and defend itself from threats in the “near abroad,” including Greenland and the Panama
The High Prosecutors’ Office yesterday withdrew an appeal against the acquittal of a former bank manager 22 years after his death, marking Taiwan’s first instance of prosecutors rendering posthumous justice to a wrongfully convicted defendant. Chu Ching-en (諸慶恩) — formerly a manager at the Taipei branch of BNP Paribas — was in 1999 accused by Weng Mao-chung (翁茂鍾), then-president of Chia Her Industrial Co, of forging a request for a fixed deposit of US$10 million by I-Hwa Industrial Co, a subsidiary of Chia Her, which was used as collateral. Chu was ruled not guilty in the first trial, but was found guilty
A wild live dugong was found in Taiwan for the first time in 88 years, after it was accidentally caught by a fisher’s net on Tuesday in Yilan County’s Fenniaolin (粉鳥林). This is the first sighting of the species in Taiwan since 1937, having already been considered “extinct” in the country and considered as “vulnerable” by the International Union for Conservation of Nature. A fisher surnamed Chen (陳) went to Fenniaolin to collect the fish in his netting, but instead caught a 3m long, 500kg dugong. The fisher released the animal back into the wild, not realizing it was an endangered species at
DEADLOCK: As the commission is unable to forum a quorum to review license renewal applications, the channel operators are not at fault and can air past their license date The National Communications Commission (NCC) yesterday said that the Public Television Service (PTS) and 36 other television and radio broadcasters could continue airing, despite the commission’s inability to meet a quorum to review their license renewal applications. The licenses of PTS and the other channels are set to expire between this month and June. The National Communications Commission Organization Act (國家通訊傳播委員會組織法) stipulates that the commission must meet the mandated quorum of four to hold a valid meeting. The seven-member commission currently has only three commissioners. “We have informed the channel operators of the progress we have made in reviewing their license renewal applications, and