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Executing the Public Debt Act to strengthen debt management.

Conetent:
1. To support the needs of local governmental reorganization and to review the overall management and control of public debt, the Public Debt Act, as amended, took effect on January 1, 2014, providing comprehensive mechanisms for debt management and control as follows.
(1) Establish a Public Debt Administration Committee
The “Organization Regulations of the Public Debt Administration Committee” and the “Operation Regulations of the Public Debt Administration Committee” are enacted to be the legal basis for forming the Public Debt Administration Committee in order to monitor and review self-redeeming public debt, the debt improvement plan, implementation schedule, and related matters.
(2) When the debt of an agency exceeds 90% of its debt ceiling, the agency should submit a debt improvement plan and implementation schedule
In the spirit of fiscal self-sufficiency, when the debt of the central government, special municipalities, counties (and county-level cities), and townships (and township-level cities) is approaching the legal debt ceiling, the agency should immediately take corrective actions. Therefore, the NTA has established rules to demand an agency, when its debt reaches 90% of its legal debt ceiling, to submit a debt improvement plan and implementation schedule. The central government shall submit the plan to the Legislative Yuan for review and examination; local governments shall likewise put forward their plans to their own Public Debt Management Committee, in order to carry out actions to improve the debt situation.
(3) Publish public debt information according to international standards so as to improve the transparency of debt information
To improve the transparency of debt information and to bring our debt information disclosure in line with international standards, the NTA has revealed information about government debts and the amounts drawn down for financial purposes from various funds in accordance with the standards of international organizations on the website of the Ministry of Finance and National Treasury Administration.
(4) Strengthen laws and regulations for debt management
To improve mechanisms for debt monitoring and management, the NTA  announced the amendment of “The Directions for the Reduction or Suspension of the Redistribution Tax Revenues to Municipal or County Governments in the Case of Non-Compliance in the Regulation of Debt” on August 26, 2016, so as to strengthen the compensation mechanism, distinguish the effects between “reduction” and “suspension” of the Redistribution Tax Revenues, as well as implement debt control measures such as executing debt repayment plans. 
2. The NTA has established a hierarchical management mechanism based on the level of the ratio of outstanding debts, and has reviewed the debt situation of local governments on a monthly basis and provided suggestions for improvements in for early prevention, timely intervention, and immediate recourse. To strengthen our counseling effectiveness, the NTA held 22 debt management counseling forums at municipal and county/city governments from 2015 to 2019. Since the outbreak of the COVID-19 in 2020, debt management counseling forums have been suspended. The NTA will provide similar services in the future according to the epidemic development trend and the debt situations of local governments.

Performance:
1. The NTA started in fiscal year 2014 to publish information about our government debts, and the amounts drawn down for financial purposes from various funds based on standards of international organizations. Since fiscal year 2004, the final accounts of outstanding debt at all levels of government have been published every half year (self-compiled but edited by the Executive Yuan) as well as the  final accounts of outstanding debt at all levels of government (edited by the National Audit Office) to show the general debt situation in order to fully reveal fiscal information of governments and effectively raise transparency.
2. The final audit accounts of long-term debts of all the special municipalities combined for fiscal year 2020 were 3.89% as a percentage of average GDP for the previous three fiscal years. That was 3.76 percentage points below the debt ceiling of 7.65% set by the Public Debt Act. The final audit accounts of long-term debts of all the counties (and county-level cities) for fiscal year 2020 were $145.8 billion, decreasing by NT$22.1 billion, NT$17.8 billion, NT$13.5 billion, NT$10 billion, NT$5.9 billion, and NT$3.4 billion compared to 2014, 2015, 2016, 2017, 2018, and 2019 respectively, indicating substantial debt reduction in six consecutive years. Those six consecutive years achieved a real decline in debt burdens.
3. Yilan and Miaoli Counties, with their debts exceeding the debt ceilings, repaid NT$177million and NT$181 million respectively as of the end of May fiscal year 2022. They both complied with the debt payment schedule that the Executive Yuan had approved for the end of May fiscal year 2022, with an execution ratio of 44.25% and 36.20%, respectively. The percentages of the budgeted debt amounts and the actual debt amounts of long-term debt of Yilan County at the said time were 39.04% and 39.28%, respectively, both lower than the legal debt ceiling of 50%. The NTA will continue to counsel local governments to improve their debt situations.

Issued:National Treasury Administration Release date:2019-05-15 Last updated:2022-06-15 Click times:437