Premier Tang Fei (
The fund consists of income, commodity and corporate taxes filed with the central government from local governments, which is then redistributed to localities.
"Central government currently faces a shortage of revenue, and we think this new measure should be acceptable to all local administrations even though they may feel short-changed," said government spokeswoman Chung Chin (鍾琴).
Chung also said that the cabinet would draw up a fair and equitable scheme for distribution of the remainder of the fund, based on the area, population and local needs of the different counties and cities as soon as possible. The National Financial Policy Conference in August will try to formulate a proper and lasting measure for allotting tax redistribution funds," Chung said.
The Cabinet yesterday spent two hours debating the issue. The heads of the two special municipality governments (a position which confers Cabinet membership on its holder) -- Taipei mayor Ma Ying-jeou (
Ma reasserted during the meeting that President Chen Shui-bian (
Taipei County Commissioner Su Chen-chang (
Other finance officials explained that the new government did not have enough money to satisfy all local administrations for the time being, since it had to help those counties and cities that were seriously under-funded.
Ultimately, Premier Tang decided to reduce the current 47 percent for the two special municipality governments to 43 percent and to raise the current 35 percent for the other 23 county and city governments to 39 percent, while allotting the remaining 12 percent to township administrations and 6 percent to the central government for retention in the Special Redistribution Fund.
In light of the new measure, Taipei City Government will, relative to the budget for the current fiscal year, be short of about NT$4.2 billion in the 2001 fiscal year while Kaohsiung City government faces a shortfall of NT$1.4 billion.
Ma Ying-jeou emerged from the meeting room at the Executive Yuan after Tang announced his decision and solemnly told reporters that the residents and government of Taipei would never accept this result, saying that the Cabinet would pay for breaching the president's promise.
"The cabinet is totally ignoring what President Chen had said to the public," Ma said, "That sets the worst possible example to society."
At the same time, Chung Chin argued in her weekly press conference that the Executive Yuan had ultimately kept to the spirit of President Chen's promise.
"President Chen said that the cabinet would maintain a percentage concomitant with the amount of tax revenue Taipei paid to the central government," Chung said.
Chung said that last year the central government received more tax revenue from Taipei city than this year because the rating of corporate taxes for the financial services sector had been reduced from 5 percent to 2 percent on July 1.
"In accordance with the new ratings for all taxes, therefore, the central government should only give the two special municipalities 42.6 percent of the tax redistribution funds," Chung said.
"But we have in fact budgeted 43 percent for them. This means that the cabinet did not break the president's promise," Chung added.
Meanwhile, the three representatives of the 23 local counties' and cities' commissioners and mayors said after the Cabinet meting that, while they still objected to the new measure, they felt that they had no alternative but to accept it.
"Those two special municipalities, which have only 4 million residents, receive 43 percent of the funds, while our 23 counties and cities, with 19 million residents, get only 39 percent," Su told reporters after the Cabinet meeting.
Su and the other two commissioners said that they had to discuss with other local government heads before deciding on their next step.
"We would expect the central government to draw up a new formula for the allocation of tax redistribution funds as soon as possible," Su said.
Premier Tang's decision apparently failed to bring an end to the dispute, being greeted with more expressions of opposition from local administrations.
Representatives of Taipei -- including lawmakers and city councilors -- stood behind Ma in a press conference in the afternoon, bitterly criticizing president Chen for betraying the city's residents.
"[President Chen] gained his fame and forged his later political career in Taipei. How can he now abandon all its residents after becoming president?" said Wang Hao (王浩), a KMT Taipei city councilor.
KMT Chairman Lien Chan (連戰) ordered the party's think-tank members to set up a task force to research systems for allotting tax redistribution funds.
However, some lawmakers from local counties and cities -- mostly DPP and KMT members -- publicly appealed to the Cabinet to give "poorer" local administrations more resources while complaining that the two special municipality governments continued to benefit too much from central government coffers.
"Mayor Ma should not take advantage of others and yet claim that he has been wronged," said DPP lawmaker Tsai Huang-liang (蔡煌瑯).
"If Ma unites with Taipei's public representatives to oppose the will of the Cabinet, we will also unite the public representatives of 23 counties and cities to fight for our rights," Tsai said.
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