The Executive Yuan approved draft amendments to the Act Governing the Allocation of Government Revenues and Expenditures today. The amendments raise local government funding to a record NT$1.2002 trillion (US$38.433 billion) for next year. Local Government Funding aims to ensure fairer distribution, stronger central-local partnerships, and improved urban-rural balance.
The Ministry of Finance explained that central subsidies include shared tax revenues, general grants, and project-based grants. The draft guarantees that total allocations will not fall below this year’s levels. Shared tax revenue will reach NT$821.3 billion, a NT$353.7 billion increase compared with the current fiscal year.
The proposed increase eliminates the need for additional augmentation funds under general grants. However, NT$108 billion will return to local governments for administrative functions. The Ministry of Finance emphasized that shared tax revenues will first cover fiscal shortfalls, ensuring all local governments start from an equal baseline.
General grants totaling NT$250.1 billion will remain focused on education, social welfare, and basic infrastructure. Of that, NT$142.1 billion is earmarked for key social services, while NT$108 billion will cover basic fiscal needs first addressed by shared tax revenues.
The amendments introduce a distribution formula for all 22 counties and cities. The formula accounts for population structure, land management, and pollution-control costs to balance urban and rural development. Officials said the method will fairly allocate funds to meet agricultural, industrial, and regional needs.
Project-based grants supporting major public infrastructure and improving citizens’ quality of life will remain at NT$236.8 billion. This includes investments in rail projects following the conclusion of phase five of the Forward-looking Infrastructure Development Plan.
Officials said the Local Government Funding increase will strengthen local autonomy and improve residents’ daily lives. The Cabinet aims to ensure all local governments can deliver essential services efficiently and equitably in 2025.
