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Ma fights for Taipei's share of tax revenue

Battle over revenue * Taipei argues that the city contributes the most to the nation's coffers, so it deserves the biggest share of revenue. * Kaohsiung contends that many companies have factories in the south, but corporate offices in Taipei, so they pay taxes in Taipei City while polluting and using services in Kaohsiung.

Taipei City Mayor Ma Ying-jeou (馬英九) pleaded with the Cabinet yesterday not to cut Taipei's share of the tax redistribution fund that helps finance the operations of municipal governments.

Taipei and Kaohsiung received 43 percent of the fund this year, down from 47 percent the previous year. Of that amount, Taipei got 73.55 percent and Kaohsiung 26.45 percent.

The reduction means NT$4 billion less in funding for Taipei this year.

Kaohsiung is asking for a bigger share of the handout that is split with its northern neighbor. The city is asking for as much as 35.88 percent of the amount.

"We have no problem keeping the fund distribution at its current level of 43 percent for Taipei and Kaohsiung," Ma said yesterday during a meeting with Premier Chang Chun-hsiung (張俊雄). "But it'd be too much to adjust the 73.55 percent reserved for Taipei."

Ma said that Taipei's share of the tax redistribution fund should be maintained because the city contributes the most revenue to the nation's coffers.

"The city has been very cooperative in terms of paying taxes. Forty percent of the central government's tax income comes from us," he said.

The city would lose as much as NT$6.3 billion should the Cabinet reduce Taipei's share of the fund from 73.55 percent to 64.12 percent.

The tax redistribution fund consists of income, commodity and corporate taxes paid to the central government by local governments, which is then redistributed back to them.

Taipei's spending budget for next year is estimated at NT$153 billion, while its revenue is estimated at NT$138.4 billion.

The city is scheduled to approve its proposed annual budget during next Tuesday's city affairs meeting. Once approved, the budget will go to the City Council for further review and final approval.

Ma said that while much of the political focus is placed on the NT$240 billion redistribution fund, the central government gives out another NT$300 billion through a supplementary fund. The supplementary fund includes money from inheritance taxes, commodities taxes and others.

The mayor said that Kaohsiung this year received 3 percent of that amount, while Taipei received none.

Kaohsiung Mayor Frank Hsieh (謝長廷) said yesterday that the tax redistribution fund should be allocated fairly, and noted that many of Taiwan's industries are located in the southern city though they have Taipei addresses.

He said that many factories located in Kaohsiung that cause a number of the city's pollution and traffic problems "pay their business taxes to Taipei City," where many company headquarters are located.

That's why Kaohsiung wants a greater share of the tax redistribution fund that is split between the two cities, he said.

But Hsieh denied asking the Cabinet to distribute the fund "evenly".

Refusing to comment further, Hsieh said that he doesn't know whether the Cabinet has decided to act on his proposal.

According to data released from the Directorate General of Budget Accounting and Statistics, Taipei received NT$49.3 billion from the tax redistribution fund this year. Kaohsiung received NT$17.7 billion.
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