Taiwanese Local Mayors Press for Prompt Reform of Revenue Allocation Law

Taiwan's Fiscal Debate: Local Mayors Urge Quick Action on Revenue Sharing

A significant debate is unfolding in Taiwan concerning the "Financial Revenue and Expenditure Allocation Act," a critical piece of legislation that dictates how tax revenues are distributed between the central government and local municipalities. Local leaders are vocal about the urgent need for reform, with Taichung Mayor Lu Shiow-yen asserting that amendments could be completed within a month if the central government demonstrates genuine commitment.

This law is fundamental to how local governments fund their public services, infrastructure projects, and administrative operations. Many city and county leaders argue that the current distribution model is outdated and unfairly deprives local entities of sufficient resources to meet the needs of their communities. They contend that a greater share of national revenue is essential for fostering regional development and improving local living standards.

Calls for Expedited Legislative Process

Mayor Lu Shiow-yen, representing one of Taiwan's largest cities, has been a prominent voice in this discussion. She emphasized that the complexity of the law should not be an excuse for prolonged inaction. According to her, with sincerity and a focused effort from the Executive Yuan – Taiwan's central administrative branch – a revised version of the act could be drafted and passed swiftly by the Legislative Yuan. Other opposition-aligned mayors, such as New Taipei City Mayor Hou Yu-ih, have echoed these sentiments, highlighting the financial pressures faced by local governments.

Central Government's Stance and Challenges

In response, Premier Cho Jung-tai of the central government has acknowledged the need for a review but has indicated that a comprehensive examination is required, rather than a piecemeal amendment. The Premier has also suggested that the Legislative Yuan, Taiwan's parliament, bears responsibility for addressing any issues within the current allocation formula. Taipei Mayor Chiang Wan-an has adopted a more understated approach in his public remarks, reflecting the nuanced political landscape surrounding this issue.

The core of the dispute often revolves around which level of government should have primary responsibility for certain expenditures and how local contributions to the national economy are reflected in revenue sharing. Reaching a consensus on a new formula is challenging, as it involves balancing the needs of diverse regions and ensuring overall national fiscal stability.

What happens next

The ball is now firmly in the court of both the Executive Yuan and the Legislative Yuan to address these calls for reform. While the central government has committed to a review, the timeline and scope remain subjects of intense political negotiation. Local leaders are expected to continue advocating for their positions, potentially increasing pressure on lawmakers to prioritize this legislative amendment. The path forward will likely involve extensive discussions and compromises between different political factions and levels of government to reshape Taiwan's financial landscape.