Legislative Yuan Debates KMT’s Proposal for Public Cash Handouts
Taiwan’s Legislative Yuan Finance Committee conducted a preliminary hearing on Monday regarding a Kuomintang (KMT) proposal to amend the Surplus Act, which would mandate distributing cash handouts to the public when annual tax revenues significantly exceed budget estimates.
The proposal, which has been backed by the Taiwan People’s Party (TPP), aims to provide direct financial benefits to citizens when tax revenue exceeds projections by 120% or at least NT$300 billion (US$9.08 billion).
This move has sparked debate between the KMT-led Legislature and the Democratic Progressive Party (DPP)-led government, which has proposed alternative uses for surplus tax revenue, such as paying down national debt, boosting the defense budget, or saving for future economic downturns.
KMT’s Proposal and Tax Surplus Data
In fiscal year 2024, Taiwan’s total tax revenue reached NT$3.7619 trillion, setting a new record. This exceeded the government’s projected revenue by NT$528.3 billion, prompting KMT lawmakers to argue that citizens deserve to benefit directly from the nation’s economic success.
The KMT’s cash handout plan suggests distributing NT$10,000 (US$303) per person, which would cost NT$230 billion—less than half of the 2024 surplus.
KMT lawmaker Lo Ming-tsai (羅明才) stated during the hearing that other developed economies such as Japan, Singapore, Hong Kong, Macau, and the United States have implemented similar cash handout schemes during times of economic growth or crisis relief.
“The government should return excess tax revenue to the people instead of hoarding it or misallocating it for other spending,” Lo said.
Government’s Opposition and Constitutional Concerns
The DPP-led Executive Yuan has strongly opposed the proposal, citing concerns about financial sustainability and the legality of the legislative amendment.
DPP legislator Wu Ping-jui (吳秉叡) argued that Taiwan’s Constitution states that only the Executive Yuan can initiate budget-related bills, while the Legislative Yuan is limited to reviewing them.
“The KMT’s proposal is essentially a budget bill disguised as an amendment to existing law, which could be unconstitutional,” Wu claimed.
Additionally, Deputy Minister of Finance Juan Ching-hua (阮清華) warned that high tax revenues do not guarantee financial stability, as Taiwan has faced budget deficits in most years between 2012 and 2023.
“If this law is passed and tax revenues exceed projections but still fall short of government spending, we could be forced to borrow money to fulfill cash handouts, putting financial strain on the country,” Juan cautioned.
Next Steps: Legislative Review and TPP’s Role
Despite opposition, the Finance Committee approved the proposals for further discussion in the full Legislature on Friday (March 22, 2025).
The Taiwan People’s Party (TPP) will play a key role in determining the fate of the proposal, as cross-party negotiations will take place regarding potential amendments to the law.
TPP’s stance remains unclear, as the party has previously supported both tax rebates and budget surpluses for long-term investment in infrastructure.
If the bill passes the Legislature, it would still require approval from the Executive Yuan, where President Lai Ching-te’s (賴清德) administration may veto or modify the proposal.
Potential Impact of the Proposal
If implemented, the NT$10,000 per person handout would provide immediate economic relief to millions of Taiwanese citizens.
However, critics argue that long-term economic planning and fiscal responsibility should take precedence over one-time cash distributions.
Economists have also expressed concerns that a mass distribution of funds could increase inflationary pressures if not properly managed.
Possible Outcomes
- If passed: Every citizen could receive NT$10,000, with future tax surplus distributions becoming law.
- If rejected: The DPP government may continue prioritizing debt repayment, defense spending, or economic reserves over direct handouts.
- If modified: The Legislature and the Executive Yuan may reach a compromise on tax surplus utilization.
The final decision on the tax surplus cash handout policy is expected to be made in the coming weeks, following full legislative debate and potential government intervention.
FAQs
What is the KMT proposing regarding tax surplus revenues?
The KMT is proposing an amendment to the Surplus Act, requiring the government to distribute cash handouts to the public whenever tax revenues exceed projections by 120% or NT$300 billion.
How much would each person receive if the proposal is approved?
Under the KMT’s proposal, each citizen could receive NT$10,000 (US$303).
Why is the DPP government opposing this plan?
The DPP-led government argues that tax surpluses should be used for paying off national debt, boosting defense, or reserving funds for future needs. They also question the constitutionality of the proposal.
Has Taiwan given cash handouts before?
Yes. Taiwan has previously issued direct cash handouts, such as COVID-19 relief subsidies and economic stimulus vouchers.
What happens next?
The Legislative Yuan will review the proposal on Friday, March 22, 2025, with cross-party negotiations between the KMT, DPP, and TPP. If passed, it would require Executive Yuan approval before implementation.
Could this proposal impact Taiwan’s economy?
Economists suggest that while cash handouts stimulate short-term spending, they may also increase inflation if not properly managed. Critics also warn about long-term financial risks if the government is forced to borrow money for future handouts.
