The legal basis of the budget system and the differentiation of income and expenses in the Republic of China
The Republic of China was established in 1912. After the defeat in the civil war, in December 1949, the state authorities were evacuated to the island of Taiwan, which by that time had the status of a province. Conceptually, as in the case of tax law, the budget law of the Republic of China is in many ways identical to the analogues of other states, but the territory actually under the control of the authorities influenced the composition of the budget system and the tax system of the Republic of China. In 1994 - 1999 . In the Republic of China, local government reform has been carried out, the functions of provincial governments have been reduced and their level has been lowered. The provinces themselves have not been abolished, and instructions about them are still contained in the legislation. However, the authorities of this administrative territorial unit do not accept budgets and there are no provincial taxes. The study of the law of the Republic of China shows, in particular, that the provisions of the Basic Law (Constitution) of the state do not always allow us to come to reliable conclusions, for example, about the budgetary structure.
Keywords: budget system, government revenue distribution, tax revenues, local taxes, subsidies, provinces, laws, interpretations, Constitutional Court, Taiwan.
Budget law is a set of financial and legal norms regulating relations on the organization of the budget system, determining the composition and procedure for dividing income and expenses in the budget system, the budgetary competence of the state and municipalities, as well as the budget process <1>.
--------------------------------
<1> See: Khimicheva N.I., Pokachalova E.V. Financial law: Textbook-method. complex / Ed. by N.I. Khimicheva. M.: Norma, 2005. p. 173.
Russia has a rich history and a doctrinal basis of budget law. The importance of budget law for the economy of the state has predetermined its rather dynamic nature. Relevant changes, including certain categories of budget law, are under the close attention of domestic scientists <2>, are regularly included in the agenda of conferences (an example is the meeting of the section of the Department of Financial Law of the O.E. Kutafin University (MGUA), held in April 2024 as part of the XI Moscow International Legal Forum <3>).
--------------------------------
<2> See: Boltinova O.V. The evolution of the budget process of the Russian Federation in the context of the transformation of budget legislation // Current problems of Russian law. 2023. Vol. 18. N 11. pp. 65-72.
<3>
Improving the legal foundations of the budget system and the procedure for dividing income and expenses involves, among other things, studying the legislation and practice of other States and territories.
The Russian school of comparative law is characterized by an appeal to the legislation and practice of the main trading partners, primarily some G7 states. At the same time, there are equally interesting examples that have not yet attracted more attention from scientists involved in public finance.
One such example is the budget law of the Republic of China, better known by the name of the island that makes up the main part of the controlled territory; various names are used in English (historically - Formosa, politically - Chinese Taipei, etc.).
Conceptually, as in the case of tax law, the budget law of the Republic of China is identical to the analogues of other states and territories. At the same time, the administrative-territorial structure has influenced the presence of some features of the budget system and the order of differentiation of income and expenses.
The Republic of China was established in 1912. After the defeat in the civil war, in December 1949, the state authorities were evacuated to the island of Taiwan, which by that time had the status of a province. There, the development of budget law continued, the formation of the legal foundations of which was started back on the mainland.
The governance structure based on the 1947 Constitution was not initially changed due to claims to the territory of mainland China. The resulting administrative imposition had various manifestations.
On the one hand, during the preparation of the 1950 budget, an agreement was reached with the Government of Taiwan Province on the transfer of tax revenues to the central government. These funds were supplemented with gold bars exported from the mainland and loans from commercial banks <4>. It is believed that the actual implementation of government was carried out through various institutions of the provincial government <5>.
--------------------------------
<4> See: Kuo-ting Li. Evolution of Policy Behind Taiwan's Development Success. 2nd ed. Singapore: World Scientific, 1995. P. 231.
<5> See: A History of China in the 20th Century / trans. by B. Doar. Singapore: Springer, 2023. P. 754.
On the other hand, due to close (often corrupt) ties with local businessmen, the provincial government in a sense even hindered the center's efforts to stimulate economic development <6>; it is noted that after the first direct elections of the governor of Taiwan Province took place in 1994, disagreements with the unelected at that time began to arise the moment of the president <7>.
--------------------------------
<6> See: Roy D. Taiwan: A Political History. Ithaca: Cornell University Press, 2003. P. 209.
<7> See: Jiunn-rong Yeh. Evolving Central-local Relations in a Contested Constitutional Democracy: The Case of Taiwan // Central-Local Relations in Asian Constitutional Systems; by A. Harding, M. Sidel. Oxford; Portland: Hart Publishing, 2015. P. 49.
The territory of Taiwan Province includes 11 counties and 3 cities of county subordination. With the exception of Penghu County, whose territory forms the archipelago of the same name in the Taiwan Strait, the territory of the province occupies the entire island of Taiwan (35.8 thousand square kilometers). Since the late 1960s, the allocation of territories of cities of central subordination began from the territory of the province, of which there are six today.
Nominally, Fujian Province also exists, but only the coastal islands of Mazu and Kinmen, which have the status of Lianjiang and Kinmen counties, respectively, are under the de facto control of the Republic of China.
In 1996, the first direct elections of the President of the Republic of China were held, and two years later, amendments and additions were made to the legislation, including it was established that since December 1998, elections of the authorities of Taiwan Province would not be held, their functions were reduced and the level was lowered. Similarly, in the case of Fujian Province <8>. As a result, today the system of government of the Republic of China is represented by two levels: central and local.
--------------------------------
<8> See: Jiang Dashu, Zhang Liya. Local government: changes, innovations and practices. 2016. 71.
The legal basis of the budget system. The budget system is a set of state budgets.
In the Republic of China, the legal foundations of the budget system are formed by the provisions of the Constitution, the Law of 1932 "On the Budget", the Law of 1999 "On the Local System" and other normative acts <9>.
--------------------------------
<9> The texts of normative acts posted on the website of the Ministry of Justice were used.
In the Constitution, the budget provisions are included in three chapters, which are devoted to governance, legislation and national policy.
Chapter V defines that the Executive Chamber submits budget bills to the Legislative Chamber (Article 58) and the draft budget must be submitted three months before the beginning of the financial year (Article 59). Article 57 provides that the Executive Chamber has the right to apply to the Legislative Chamber with a request to review the resolution on the budget bill if it considers it unenforceable. This provision should be read in the wording of Article 3 of the Additional Amendments to the Constitution of 1991.
In chapter VI, the Legislative Chamber has the right to make decisions on budget bills (Article 63) and it is established that it cannot make proposals to increase expenditures in the budget bill (Article 70).
In Article 164 of Chapter XIII, the minimum percentages of budget expenditures on education, science and culture are fixed.
The law "On the Budget" was adopted on the territory of mainland China. In publications, one can find references to the fact that in 1932 the Legislative Yuan approved a new Law on Financial Control, according to which local finances should be under the control of the Ministry of Finance, and local authorities were prohibited from arbitrarily imposing new taxes, increasing existing taxes or issuing loans <10>. Perhaps we are talking about the Law in question.
--------------------------------
<10> See: Kuznetsov V.S. The Kuomintang regime in China (1931-1937) // Information Bulletin. 1988. Part 2. p. 224.
There were 18 amendments and additions to the Law "On the Budget", two of which were made before the evacuation to the island and 11 since 1998.
The Law consists of 100 articles divided into seven chapters. Chapters 2-4 are devoted to planning and drafting, reviewing and implementing the budget. Chapter 5 regulates the issues of additional and special budgets, and Chapter 6 regulates the budget of subordinate units.
Article 51 of the Budget Law stipulates that the general budget is approved by the Legislative Chamber one month in advance and published by the President 15 days before the beginning of the financial year. Article 2 clarifies that a budget that has passed the legislative procedure is called a legal (mandatory) budget.
The Law does not specify the form of the final document and its legal force. This issue was considered by the Constitutional Court. The interpretation of the Judicial Chamber of 2001 No. 520 clarifies that the form of the budget is comparable to the law, but its content, objects of regulation and methods of consideration differ from general legal bills <11>.
--------------------------------
<11> The Judicial Chamber.
Article 112 of the Constitution refers to the general principles of self-government of provinces and counties, but no law has been passed. Since 1949, local government has operated on the basis of several regulations of the Executive Chamber and the Government of Taiwan Province. The first laws on local self-government of provinces and counties and cities of central subordination were adopted only in 1994. <12> In the same year, the first direct elections were held for the governor of Taiwan Province, as well as for the mayors of the cities of central Taipei and Kaohsiung, which are recognized as historical <13>.
--------------------------------
<12> See: Gudoshnikov L., Kokarev K. Regulation of local self-government in Taiwan // Problems of the Far East. 1996. N 3. P. 50.
<13> See: Huang Yandong. Trends in the development of Taiwan's constitutional system and party politics in the new century. 2004. 233.
5 years later, the Law "On the Local System" was adopted. Of its 88 articles, over 20 are devoted to budget-related issues. Since its adoption, 13 changes and additions have already been made to it.
According to Article 3 of this Law, places are divided into provinces and cities of central subordination. Provinces are divided into counties and cities, and counties are divided into volosts, settlements, and cities of county subordination.
Article 2 of the Law "On the Local System" states that the provincial Government is an organ of the Executive Chamber and the province does not have a local autonomous government. In article 8, which defines matters under the jurisdiction of the province, there is no indication of either normative or budgetary powers.
Article 12 of the same Law stipulates that the Executive Chamber shall include the budgets of the provincial Governments in the general budget of the central Government. According to the norms of Articles 35-37, the responsibilities of the councils of cities of central subordination, counties (cities), volosts (rural and urban settlements) include making decisions on budgets. These articles, together with the provisions of the Law "On the Budget", illustrate the composition of the budget system.
In the article of the Law "On the Local System" on the responsibilities of places, the instruction on budget decision-making is preceded by an instruction on the adoption of rules, and 3 different combinations of hieroglyphs are used ( ). Some of them have the meaning of legalization, but studies note that regional rules issued by governments or councils are not considered as legislation <14>. This issue requires additional study.
--------------------------------
<14> See: Chang-fa Lo. The Legal Culture and System of Taiwan. The Netherlands: Kluwer Law International, 2006. P. 40.
The list of legal bases of budgets is not limited only to the previously mentioned documents. Other regulatory acts include the 1996 Law "On Public Debt".
This Law was passed in order to maintain the sustainability of national finances, support the needs of national development and regulate public debt. Only 4 changes were made to it, including a new version of Article 4 in 1998. This article names entities that have a public debt, and provinces do not appear in this list.
The Law "On Public Debt" provides, in particular, that in order to manage public debt, the center and cities of central subordination must allocate at least 5-6% of tax revenues of the current financial year to repay the principal amount of debt, and counties (cities) and volosts (rural and urban settlements) - at least 1% of the amount of outstanding government debt for the previous financial year (Article 12). Thus, governments at all levels should not only cover the cost of paying interest on debt, but also take measures to reduce debt.
The order of differentiation of income and expenses. Budget revenues at all levels of government come from two sources: current operations and capital transactions <15>.
--------------------------------
<15> See: Cheng-mount Cheng. Chinese Taipei / Fiscal Deficits in the Pacific Region / by A. Kohsaka. London; New York: Routledge, 2004. P. 341.
Current income includes tax and non-tax income. The latter are formed at the expense of government property, income of public enterprises, administrative fees, fines and other income. Income from capital transactions is generated through government financing, such as the issuance of government bonds and the provision of loans.
Since the first general budget of the central Government, taxes have been the main source of income. In the budget for the 1950 fiscal year, revenues from taxes and the monopoly on salt amounted to 47.5%, revenues from fees and fines - 1.3% <16>. In the budget for the 2024 fiscal year, tax revenues should amount to 84.9%, revenues from fees and fines - 2,9% <17>.
--------------------------------
<16> Directorate of Accounting of the Executive Chamber.
<17> Directorate of Accounting of the Executive Chamber.
The issues of distribution of tax revenues are regulated by the Constitution, the Law of 1951 "On the Distribution of State Revenues and Expenditures", the Methods of the Ministry of Finance of 1999 "On the distribution of centralized Tax Revenues" and tax legislation.
The differentiation of national incomes, provincial and county incomes in accordance with Article 107 of the Constitution is carried out by central legislation.
Appendix 1 to the Law "On the Distribution of State Revenues and Expenditures" lists, among other things, state taxes, taxes of cities of central subordination, counties (cities), volosts (rural and urban settlements), indicates the percentage and defines the rules for the distribution of income from individual taxes.
After the adoption of this Law, it was amended 10 times, 9 of which affected this application. During the reform of local self-government in 1999, articles 16-1, 35-1, 37-1, 38-1 and 38-2 were added to the Law "On the Distribution of State Revenues and Expenditures", articles 16, 17 and 32 were deleted, articles were amended 3, 4, 6 - 8, 12, 18, 19, 30, 31.
More recently, it was possible to find in publications information about income and taxes collected in Taiwan Province <18>. It follows from the content of the said Law that there are no provincial taxes in the Republic of China, but the provinces of Taiwan and Fujian are mentioned in this Law.
--------------------------------
<18> See: Steve Waicho Tsui. Local Government Finance and Bond Markets / by Yun-hwan Kim. Manila: Asian Development Bank, 2003. P. 507.
Article 8, on national taxes, separately stipulates that 18% of the total revenue from tobacco and alcohol taxes is distributed among cities of central subordination, counties and cities of county subordination of Taiwan Province in proportion to their population; 2% is distributed between Kinmen and Lianjiang counties of Fujian Province.
Article 16-1 also provides that the counties of Kinmen and Lianjiang of Fujian Province are considered separately for the purpose of calculating the so-called tax opportunities.
The methods "On the distribution of centralized tax revenues" were adopted on the basis of the aforementioned article 16-1 of the Law "On the Distribution of State Revenues and Expenditures", which provides that taxation is coordinated by the center in order to allocate funds to cities of central subordination, counties (cities) and volosts (rural and urban settlements).
In tax legislation, income distribution issues are regulated in terms of loss of tax income. Thus, Articles 33, 34 of the 1977 Law "On Land Tax" and Articles 58-1 of the 1973 Law "On Inheritance and Gift Tax" contain similar norms that losses of tax revenues (local authorities) by the governments of a city of central subordination, a county (city) are subject to compensation by the central government and do not fall under under the restriction of Article 23 of the Law "On the Budget", which prohibits the use of income from government bonds to cover current expenses.
Some issues of income distribution were the subject of consideration by the Constitutional Court. The interpretation of the Judicial Chamber of 1989 No. 234 states that, on the basis of paragraph 7 of Article 107 of the Constitution, the central government has legislative and administrative powers with regard to the differentiation of national, provincial and county taxes; the provisions of Article 12 of the Law "On the Distribution of State Revenues and Expenditures" concerning the distribution of business tax and stamp duty correspond to the purpose art . 147 of the Constitution, aimed at the balanced development of the local economy, and do not contradict the Constitution <19>.
--------------------------------
<19> The Judicial Chamber.
The provisions of these regulations and the legal position of the Constitutional Court indicate that the financial system of the Republic of China is centralized. This is constantly being criticized.
Moreover, based on the chronology of publications, negative ratings have persisted for many years and have not changed, despite new initiatives. The latter include the adoption of a law called the General Principles of Local Tax Legislation in 2002. Article 3 of these principles provides that cities of central subordination, counties (cities), municipalities (rural and urban settlements), depending on financial needs, may levy special, temporary and additional taxes.
Commentators point out that this is not enough and the rights of local governments are still limited; it is necessary to revise the Law "On the Distribution of State Revenues and Expenditures" to improve vertical and horizontal equality in tax decentralization <20>.
--------------------------------
<20> See: Ichimura Sh., Bahl R.W. Decentralisation Policies in Asian Development. Hackensack: World Scientific, 2009. P. 282.
Balanced assessments are much less common. A series of institutional reforms initiated in 1999 included giving local governments the right to set new taxes. This did not lead to a significant increase in local government revenues. Nevertheless, the tax revenues of the cities increased in 2013. The maximum growth was in Xinbei (by 18.89%) and the minimum in Taipei (by 5.17%). The city of Tainan lagged behind in terms of self-financing resources <21>.
--------------------------------
<21> See: Hsin-Fang Tsai. Municipal Financial Strategy Responses to Fiscal Austerity: The Case of Taiwan // Value for Money: Budget and financial management reform in the People's Republic of China, Taiwan and Australia / by A. Podger, Tsai-tsu Su, J. Wanna et al. Acton: Australian National University Press, 2018. P. 251 - 252.
Considering the negative assessments of the centralized system, it should be recalled that China has a centuries-old complex history of relations between the center and places. It begins with the unification of China and the founding of the Qin Empire in 221 BC.
It is known that during the Tang Dynasty in 780, tax quotas were established for districts and provinces, and tax collection was actually entrusted to local authorities <22>. In the XVII century, the practice of land tax surcharges became widespread, which constituted the main source of funds for local administration <23>. A characteristic feature of the financial system of imperial China was that all taxes were national and there was no differentiation in favor of provinces and cities. After the Xinhai Revolution of 1911 China's increased political fragmentation has led to further decentralization of finance <24>.
--------------------------------
<22> See: Chang K.C. Art, Myth and Ritual. The Path to Political Authority in Ancient China. Cambridge: Harvard University Press, 1983. P. 41.
<23> See: Tyapkina N.I. Village and peasantry in the socio-political system of China (the second half of the XIX - early XX century.). M.: Nauka, 1984. p. 68.
<24> See: Boldyrev B.G. Finance Of the People's Republic of China. Moscow: Gosfinizdat, 1953. p. 122.
Since 1914, the collection of all major taxes, with the exception of the maritime customs tax and salt charges, was seized by the authorities of individual provinces, who, seeing the helplessness of the center, actively imposed various taxes. Foreign observers even began to use such a concept as the orgy of taxation (English - tax orgy). This is how the situation in Canton in 1923 and 1924 was characterized. <25>.
--------------------------------
<25> See: The China Year Book: 1925 - 1926 / by H.G.W. Woodhead. New York: Brentanos, 1925. P. 880.
The government formed in 1927 in Nanjing, overcoming the resistance of local military leaders who tried to retain power and collect taxes locally, managed to ensure fiscal unity in 10 years. The system of indirect taxes gradually became more rational and centralized. Comparatively successful attempts have been made to implement annual budgets <26>. One of the aspects of the reorganization of the Chinese tax system in these years was the abolition of some of them, including the lijing (transit duty) in 1931 <27>.
--------------------------------
<26> See: Sukharchuk G.D. Socio-economic views of China's political leaders in the first half of the 20th century. Comparative analysis. Moscow: Nauka, 1983. pp. 30 - 32.
<27> See: Beal E.G. The Origin of Likin. Cambridge: Harvard University, 1958. P. 1.
In the same year, the so-called Soviet districts, which are not controlled by the center, appear <28>. In 1937, the war with Japan began, which the Government of the Republic of China entered with a tax system that did not provide significant income <29>. In 1945, in an effort to get support from landowners, the government refused to collect land tax in areas liberated from Japanese occupation for a year, and also proposed to transfer 70% of the fees from this tax to local authorities <30>.
--------------------------------
<28> See: Gubaidulin V.M. Revolutionary power in the liberated regions of China (1937 - 1945) / Ed. by L.M. Gudoshnikov. Novosibirsk: Nauka, 1981. p. 6.
<29> See: Young A.N. China's Wartime Finance and Inflation. Cambridge: Harvard University Press, 1965. P. 22 - 23.
<30> See: Meliksetov A.V. Socio-economic policy of the Kuomintang in China (1927-1949). Moscow: Nauka, 1977. p. 216.
A new history of legal relations between the center and the places began after the evacuation of the government to the island of Taiwan; if at first the island's resources were used for military purposes against the Communists on the mainland, then later the attitude changed and the efforts of the leaders of the Kuomintang Party were concentrated on economic development <31>.
--------------------------------
<31> See: Wei-bin Zhang. Taiwan's Modernization: Americanization and Modernizing Confucian Manifestations. Singapore; New Jersey: World Scientific, 2003. P. 38.
Provision of subsidies. Deficits in the budgets of local authorities, including due to a lack of tax revenues, are covered in the Republic of China, including through subsidies.
According to some data, prior to 1987, subsidies from the national and provincial governments accounted for 52.3% of revenues to the budgets of local authorities <32>. Between 2005 and 2013, the cities of Xinbei, Taipei, Taichung, Tainan and Kaohsiung had the highest degree of financial dependence, receiving 38.88% of their average annual expenses from grants <33>. Subsidies are of great importance for Nantou County, the only landlocked county in Taiwan Province; in 2017, subsidies amounted to 52.03% of the revenues of the total annual budget of the government of this county <34>.
--------------------------------
<32> See: Hess S. Authoritarian Landscapes: Popular Mobilization and the Institutional Sources of Resilience in Nondemocracies. New York: Springer, 2013. P. 56.
<33> See: Hsin-Fang Tsai. Op. cit. P. 252 - 253.
<34> See: Yaguang Hao. Grassroots Governance in Taiwan. Singapore: Springer, 2023. P. 95.
As with the tax rights of local governments, the subsidy system has been criticized. It is noted that subsidies are not always distributed fairly and the amounts received by local governments depend on both policies and preferences, as well as on merits and needs <35>.
-------------------------------
- <35> See: Rigger S. Politics in Taiwan: Voting for Reform. London: Routledge, 2002. P. 48.
Subsidies to local governments are divided into general and project grants. The subsidy system has some disadvantages.
The availability of subsidies does not encourage local governments to work on a balanced budget and effectively use their own resources.
The widespread practice of using subsidies, more precisely, the popularity among local authorities, is also due to political dynamics. The heads of cities and counties are elected to office, and they do not need alternative votes. Tax increases will lead to a loss of votes in the next election. Accordingly, local governments are pursuing a less risky strategy, demanding more subsidies from the central government or even loans from banks. Moreover, the researchers draw attention to the fact that local politicians make financially impossible promises to citizens, just to get their support <36>. This leads to an increase in annual expenses without sufficient income.
--------------------------------
<36> See: Tsuey-ping Lee, Clark C. The Limits of Budget Reform in Taiwan // Comparative Public Budgeting: A Global Perspective / by C. Menifield. Sudbury: Jones and Bartlett Publishers, 2011. P. 96, 99.
In the general budget of the central government for fiscal year 1950, the main item of expenditure was national defense expenditures - 89.9%; expenditures on subsidies and other expenses - 1.7% <37>. For the 2024 fiscal year, the main item of expenditure is social security expenses - 27.7%; expenses for subsidies and other expenses - 3,5% <38>.
--------------------------------
<37> Directorate of Accounting of the Executive Chamber.
<38> Directorate of Accounting of the Executive Chamber.
The legal basis for granting subsidies to places is determined by the provisions of the Constitution, the Law "On the Budget", the Law "On the Local System" and the Law "On the Distribution of State Revenues and Expenditures".
Article 147 of the Constitution states that in order to achieve balanced economic development, the center must provide assistance to the provinces, and they to the counties.
This provision has been developed in the laws. Article 69 of the Law "On the Local System" provides, in particular, that if a local government at any level does not receive the income to which it is entitled by law, then higher authorities may reduce the amount of the subsidy at their discretion. Article 30 of the Law "On the Distribution of State Revenues and Expenditures" describes programs and projects for which subsidies can be allocated. In Appendix 1 to the Law "On the Distribution of State Revenues and Expenditures", subsidies are named as one of the sources of income of cities of central subordination, counties (cities), volosts (rural and urban settlements). According to Article 38 of the Law "On the Budget", the allocations subsidized by each subdivision of a state institution to local self-government should be summarized in a table in the general budget proposal.
As in the case of income distribution, the issues of granting subsidies to local authorities were considered by the Constitutional Court.
The interpretation of the Judicial Chamber of 1999 No. 498 states that the Legislative Chamber cannot reduce or cancel the subsidy simply because officials of the local government refuse to attend meetings of the Legislative Chamber <39>.
--------------------------------
<39> The Judicial Chamber.
The interpretation of the Judicial Chamber of 2002 No. 550 states that in cases where local governments are required to bear part of the costs of implementing a law, for example, the provision on the ratio of subsidies and insurance premiums, as provided for in Article 27 of the 1994 Law "On National Health Insurance", they should be given the opportunity to participate in the process of drafting the law <40>.
--------------------------------
<40> The Judicial Chamber.
Commentators point out that both interpretations should be understood as means of passive protection of local governments and they should be defined together as the basis on which cooperation between the center and the places can initially develop. <41>.
--------------------------------
<41> See: Milan Tung-Wen Sun. A Preliminary Assessment of Public Management Reform in Taiwan's Local Government // Comparative Governance Reform in Asia: Democracy, Corruption, and Government Trust / by C. Wescott, B. Bowornwathana. Bingley: Emerald Group Publishing, 2008. P. 142.
So, it should be stated that in the absence of a codified act, the legal foundations of the budget system and the procedure for distinguishing income and expenses in the Republic of China are formed by a significant array of regulations. The main issues are regulated by laws, which are regularly amended.
The conceptual apparatus of the budget law of the Republic of China has some peculiarities. The legislation uses the terms "center" ( ) and "places" ( ) often without combining them with the hieroglyphs " ", which have the meaning of government. Derivatives of the terms "center" and "places" (as adjectives), together with the English word government, which can also be found on the pages of official websites of ministries on the Internet, are more of a literary translation; An example of "complementarity" in publications in English is also the well-established identification of the Law "On the Local System" as the Local Government Act.
In fact, the territory under the control of the authorities has influenced the composition of the budget system and the tax system of the Republic of China. Despite the presence of provinces, there are no taxes for this territorial unit. Thus, the instructions of the Basic Law (constitution) of the state do not always allow us to come to reliable conclusions, for example, about the tax system.
The interpretations of the Constitutional Court of the Republic of China have played a significant role in the reform of local self-government. At the same time, it follows from the interpretation of the Judicial Chamber of 1999 No. 477 that the interpretations themselves can be applied directly by various levels of courts <42>, i.e. they are sources of law.
--------------------------------
<42> The Judicial Chamber.
Despite the unitary form of government, a negative assessment of the centralized financial system prevails in the academic community, which, in the case of research by Taiwanese scientists, is likely due to the long period of martial law in the Republic of China (1949-1987) with accompanying restrictions and strong foreign influence on the legal system and legal culture, including due to the widespread practice of studying and obtaining academic degrees abroad.
The issues caused by negative assessments of the existing financial system of the Republic of China may become the subject of a separate study, but it is worth taking into account the lessons of history, which shows, in particular, that broad tax rights of places do not always and not in all cases lead to positive results.
In addition, many arguments against a centralized financial system may be refuted by the well-known successes of economic development, dubbed the "Taiwanese Miracle" (eng. Taiwan Miracle). From 1953 to 1990, the average annual growth rate was 8%, and subsequently - 4% <43>. Taiwan Province of China is classified by the International Monetary Fund as one of 42 countries with developed economies <44>. This list of indicators can be continued.
--------------------------------
<43> See: Fu-Lai Tony Yu. Taiwan's Economic Transformation in Evolutionary Perspective: Entrepreneurship, Innovation Systems and Government. New York: Nova Publishers, 2007. P. 26.
<44> IMF. Country Composition of WEO Groups.
At the same time, data on the achievements of the Republic of China can be used as an argument about the need to study the law of small states, and not just the regulars of comparative law.
From the point of view of the perception of positive experience, it cannot be said that the legal foundations of the budget system and the procedure for distinguishing income and expenses in the Republic of China can act as a guideline for the budget law of Russia. However, some of the provisions considered deserve attention in the context of improving regulations.
