TAIPEI (Taiwan News) — Premier Cho Jung-tai (卓榮泰) on Wednesday unveiled the Cabinet’s proposed amendments to the Act Governing the Allocation of Government Revenues and Expenditures, calling it the version best suited for building political consensus.

The Ministry of Finance said the Cabinet’s proposal gives local governments more revenue but also greater responsibility, per Tai Sounds. The ministry said the approach ensures the central government retains the capacity to push major policy initiatives while maintaining financial stability.

Officials said the Cabinet’s version promotes balanced regional development by giving non-special municipalities a greater increase in revenue, while special municipalities would also see gains, though at a smaller scale. Cabinet Secretary-General Xavier Chang (張惇涵) said the plan supports regional growth without undermining the competitiveness of special municipalities, per UDN.

Cho criticized the Legislative Yuan’s competing proposal, saying it would create budget shortfalls, worsen regional inequality, and violate procedural justice, per ETtoday. If the government were forced to accept the Legislature’s version, Cho warned Taiwan would face a “financial mudslide.”

Tainan Mayor Huang Wei-che (黃偉哲) echoed the government’s criticism on Tuesday, arguing that the Legislature’s version would deepen regional disparities, per Liberty Times. He said central and southern Taiwan have long borne the environmental cost of national economic growth, while northern Taiwan collects tax revenue from corporate headquarters responsible for pollution in the south.

The Kaohsiung City Government expressed support for the Cabinet’s proposal, saying factors such as pollution, municipal size, and population composition make it fairer than the Legislature’s version, per CNA. Kaohsiung said it requires the level of grants provided under the Cabinet plan to continue developing.

Taoyuan Mayor Chang San-cheng (張善政) praised the Cabinet for submitting its own version of the amendment and called on all parties to refine the proposal, per UDN. However, Taoyuan Deputy Mayor Wang Ming-jiuh (王明鉅) was less positive.

Wang questioned why the revenue allocation formula accounts for agricultural output but not industrial output. He also criticized the Cabinet for failing to provide specific estimates of how much funding each municipality would receive under its plan.