Fri, Oct 12, 2012 - Page 13 News List

Local government income distribution a cause of concern

MORE CASH:Minister of Finance Chang Sheng-ford assured legislators that local governments would receive a higher amount of tax revenues

By Amy Su  /  Staff reporter

The legislature’s Finance Committee yesterday passed a proposal to ask the Ministry of Finance to produce a spreadsheet detailing income distribution to all local governments next week to prove that the ministry’s distribution formula is fair.

The spreadsheet would also help local governments see whether they will have more sources of finance following the upcoming amendments to both the Act Governing the Allocation of Government Revenues and Expenditures (財政收支劃分法) and the Public Debt Act (公共債務法), the committee said in a written proposal.

The proposal came after the ministry published details of the finances of local governments and it forecast their sources of finance both before and after the amendment to the acts.

The amendments are seen as a way of raising the unreasonable public debt ceilings of the five special municipalities, especially the most recently created special municipalities of Greater Taichung, Greater Tainan and Greater Kaohsiung.

The amendment also seeks to help solve the heavy debt burden facing local governments, which amounted to NT$833 billion (US$28.3 billion) as of the end of last month, by offering more sources of finance to the governments.

“The ministry should publicize the distribution formula, or almost every local government will criticize the central government’s distribution formula and claim it is being hard done by,” Chinese Nationalist Party (KMT) Legislator Lu Shiow-yen (盧秀燕) told reporters on the sidelines of a question-and-answer session at the legislature.

Various lawmakers spoke up for the city or county they represent during the session, saying the sources of finances following the amendments would still not be enough to cover that region’s expenses.

Facing these concerns, Minister of Finance Chang Sheng-ford (張盛和) said the amendments would mean that local governments receive a higher amount of centrally allotted tax revenue.

“The overall amount [of tax revenue distributed to local governments] will increase,” Chang said.

Based on last year’s tax revenues, the annual distribution of centrally allotted tax revenue expected to be received by local governments after the amendments are passed would be NT$347.6 billion, compared with NT$209.5 billion previously, Chang said.

The amendments would also see local governments receive an extra NT$43.8 billion in new sources of finance when also taking into consideration the grants offered by the central government, the minister added.

Chang said the self-financing resources of local governments may account for at least 70 percent of their annual expenditure, up from 60 percent, following the amendments.

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