TAIPEI (Taiwan News) — Cabinet Spokesperson Li Hui-chih (李慧芝) said Wednesday that the government had warned the opposition about flaws in its amendment to the Act Governing the Allocation of Government Revenues and Expenditures, but those warnings were ignored.

The Ministry of Finance announced Wednesday that the amendment, passed by the opposition, rendered NT$34.5 billion (US$1.1 billion) in government revenue unable to be distributed, per Liberty Times. Li said the Cabinet had flagged three major concerns when requesting the Legislative Yuan to reconsider: flaws in the allocation formula, unclear delineation of responsibility between central and local governments, and the risk of exacerbating the urban-rural divide, per CNA.

Li emphasized that the inability to distribute the NT$34.5 billion stems directly from the opposition-backed amendment. She said the Cabinet will invite the mayors and magistrates of all 22 municipalities to discuss potential solutions.

Premier Cho Jung-tai (卓榮泰) backed Li’s comments, saying the issue could have been resolved if the legislature had accepted the Cabinet’s request for reconsideration. President Lai Ching-te (賴清德) added that reducing central government revenue would limit the government’s ability to respond to emergencies like natural disasters, per TTV. Lai also said that the DPP was not responsible for the current budget impasse.

In response, KMT Chair Eric Chu (朱立倫) acknowledged that the formula had a flaw but argued that the Ministry of Finance should have resolved the issue and still distributed the NT$34.5 billion across all municipalities, per Newtalks. Chu also urged the government not to convert general grants into program-based grants, which require applications and review processes.

Although the revenue allocation formulas for Taiwan’s 19 main island municipalities and three outlying island municipalities are calculated separately, the amendment’s formula uses all 22 municipalities in the denominator for both calculations, making it impossible to distribute the full NT$34.5 billion.

Fifteen opposition-aligned mayors and magistrates issued a joint statement on Wednesday, urging the central government to honor the spirit of the amendment, per ETtoday. They called on the government to allocate tax revenue as intended by the spirit of the amendment, avoid turning general grants into program-based grants, and refrain from altering already designated general and program-based grant allocations.