Local Government Act Article 69

To ensure balanced development of the local governments, higher levels of government shall provide subsidies to local governments with lesser financial capabilities and may receive assistance funds from local governments with greater financial capabilities.If a local government at any level fails to collect income that it is entitled by law to collect, the higher levels of government may reduce the amount of subsidy at their discretion. For local governments that have achieved results in generating other sources of income, higher levels of government may increase the amount of subsidy at their discretion.The subsidies stipulated in Paragraph 1 shall include the subsidy item, recipient, subsidy percentage, and handling guidelines. The guidelines on the allocation of subsidies shall be formulated separately by the Executive Yuan and county governments.