National debt falls on income tax influx

PAYBACK::The Ministry of Finance said that tax revenue had allowed the central government to repay debt and asked local governments to also reduce their debt

By Amy Su  /  Staff reporter

Mon, Jul 09, 2012 - Page 13

Taiwan’s national debt declined to NT$216,000 (US$7,200) per person as of the end of last month, down NT$7,000 per person from the previous month, as income tax revenue gradually entered national coffers and helped the government repay part of its long-term debt, the Ministry of Finance said on Saturday.

It was the second consecutive month that national debt has fallen, with the NT$216,000 level of per capita debt the lowest level yet in the first half of the year, the ministry statistics showed.

“The major part of income tax collected in May has already entered into the national account, helping the government repay part of its national debt,” a National Treasury Agency official said by telephone yesterday.

In addition, the government’s capital demand on short-term debt slowed last month, also dragging national debt down, the official said.

National debt, which includes the central government’s long-term and short-term debt, amounted to NT$5.024 trillion as of the end of last month, from NT$5.174 trillion posted a month earlier, ministry data showed.

Government bonds — the central government’s outstanding debt with a maturity of more than a year — totaled NT$4.894 trillion, down from NT$4.934 trillion the previous month.

Treasury bills — the central government’s outstanding debt with a maturity of less than a year — stood at NT$130 billion, down from NT$240 billion a month ago.

On the local government front, total public debt amounted to NT$822.3 billion as of the end of May, with residents in the five special municipalities shouldering the heaviest debt burden.

The Kaohsiung City Government’s debt totaled NT$213.6 billion at the end of May, translating into debt of NT$77,000 per capita, the highest level among all local governments, ministry data showed.

The Taipei City Government placed second-highest by posting NT$170.8 billion in debt at the end of May, followed by Tainan City, New Taipei City (新北市) and Taichung City, statistics showed.

In addition, long-term debt for Yilan County, Miaoli County and Hsinchu City at the end of May accounted for 70.57 percent, 57.59 percent and 49.14 percent of the authorities’ annual expenditure respectively, exceeding the statutory debt ceiling of 45 percent.

The ministry said it has asked these authorities to come up with debt-reduction plans.

In contrast with these cities, Kinmen and Lienchiang counties were the only two local governments posting zero debt at the end of May, the ministry said.

To find a comprehensive solution to local governments’ financial problems, Minister of Finance Chang Sheng-ford (張盛和) is leading the ministry’s taskforce on national taxation and finance in its first meeting in Kaohsiung tomorrow, which will be followed by a meeting in Taichung on July 31.

Other than the debt issue, these meetings will also focus on possible measures to activate state-owned assets, the ministry said.