To strengthen local financial guidance and assist local governments in broadening their revenue sources and improving financial efficiency, the Ministry of Finance （MOF） and the Yilan County Government jointly convened the "2025 Local Finance Conference" on the 11th of this month. The fiscal and accounting heads of most local governments attended in person or appointed representatives to attend.

This is the first time the MOF has co-hosted the conference with a local government, combining the previously separate “Communication Meeting for Local Government Finances” hosted by the MOF and the “National Local Finance Communication Conference” hosted in rotation by local governments. The goal is to enhance the effectiveness of intergovernmental financial collaboration.

During the conference, Deputy Administrative Minister Juan Ching-Hwa issued awards to top performers in the 2024 Local Government Finance Management Support Scheme. He also urged local governments to make effective use of the increased financial resources under the newly implemented Fiscal Revenue and Expenditure Allocation Act （hereinafter referred to as the "FREA Act"）, ensuring that funds are spent where most needed. He called on financial and accounting personnel to rigorously uphold fiscal discipline. The central government will also review and enhance the assessment mechanisms to ensure the long-term stability and sustainability of local finance.

To promote outstanding examples of revenue generation and cost reduction, and develop new thinking in finance, this meeting facilitated experience sharing by top performers. Kinmen County Government explained its improvement of financial management by prioritization of policy implementation, strict budget control, and active review of the progress and effectiveness of offshore island infrastructure fund projects. Additionally, by selling non-public county-owned real estate, outsourcing operations to private entities, and collecting duty-free shop permit fees, the county significantly increased its revenue.

Taitung County Government presented its debt management experience, highlighting effective debt control in recent years. To improve financial efficiency, the county actively implemented various measures to increase revenue and reduce expenses, such as collecting a special tax for landscape maintenance from excavation activities, auctioning off gravel resources, reviewing fee structures, attracting investment to expand the tax base, adopting centralized payment systems, and instituting large-sum payment reporting mechanisms — all contributing to successful debt management.

Taipei City Government shared its experience in issuing sustainability bonds, explaining the procedures and rationale behind issuing social responsibility bonds to fund Taipei Metro construction. This showcased innovative government financing tools. All fiscal heads of local governments recognized the contribution of the aforementioned examples and presentations.

During the proposal discussion and opinion exchange session, participants discussed issues such as the issuance of sustainability bonds and subsidies. In response to local governments' concerns over the distribution of financial resources under the new FREA Act, the Ministry of Finance stated that it had convened a meeting with local governments on August 15 this year to review the allocation formula for shared tax revenues. Consensus was reached on ranking scores and distribution formulas for townships, and these were applied in the calculations.

As for disputes over the denominator used in the distribution formula, the MOF emphasized that the law clearly states it must include all municipalities and counties/cities, and that any changes must go through legislative amendments. Regarding offshore island counties, the MOF will continue to provide special shared tax allocations to cover shortfalls compared to the previous fiscal year, and the Directorate-General of Budget, Accounting and Statistics under the Executive Yuan will provide additional subsidies based on actual needs.

As for a potential second round of amendments to the FREA Act, the MOF emphasized that since the Act involves redistribution of financial resources among different levels of government, it requires thorough discussion and careful planning. The goal is to address issues caused by the significant reduction of central government resources without a concurrent review of the division of responsibilities between central and local governments, as well as to resolve the widening urban-rural gap and other formula-related disputes. A comprehensive review of both vertical and horizontal distribution mechanisms is necessary. The MOF will follow the Executive Yuan’s guidance and continue to consult with local governments based on existing consensus, striving to establish a sustainable and long-term allocation mechanism.

News release contact: Section Chief Lo, Jui-hung

Tel.: （02） 2322-8401