The Ministry of Finance's plan to adjust the allocation ratios of the tax redistribution fund has yet to be finalized, Premier Chang Chun-hsiung (張俊雄) said yesterday.
Chang was responding to media reports that the finance ministry has drafted a plan to lower the fund's allocation ratios for the two special municipalities -- Taipei and Kaohsiung -- from the current 43 percent to 36.22 percent for fiscal 2003.
The reports also said that the percentage for other cities and counties would be raised to 45.72 percent from the present 39 percent.
If the plan is approved, Taipei and Kaohsiung would see a decrease of NT$10.6 billion in their total tax redistribution funds, while other cities and counties would enjoy a combined NT$10.5 billion increase in redistribution funds.
The reports caused an immediate backlash from the Taipei and Kaohsiung city governments.
Chang yesterday said that he asked the finance ministry to draft an allocation ratio adjustment plan earlier this year in order to avert frequent squabbling among local governments over funds.
"The finance ministry has not yet presented its draft plan to the Cabinet for approval," Chang said, adding that once the Cabinet receives the plan, relevant central government agencies will further discuss details with all local governments.
Minister of Finance Yen Ching-chang (顏慶章) said his ministry is scheduled to discuss the issue with finance chiefs of city and county governments this Monday.
"Once the allocation ratios are settled, they will no longer be subject to annual adjustments, as in the past," Yen said.
Yen said that, by order of the premier, the finance ministry has invited five scholars to work out the new allocation formula after a careful evaluation of the land acreage, population and tax revenues of the various localities.
Yen urged Taipei and Kaohsiung municipal officials to examine whether the new formula is reasonable, instead of simply complaining about the anticipated decrease in redistribution funds.
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