EXPLAINER/The Cabinet's refusal to sign revised revenue-sharing law

Taipei, Dec. 16 (CNA) Premier Cho Jung-tai (卓榮泰) on Monday said that he will refuse to countersign amendments to a revenue-sharing law passed by the opposition-controlled Legislature -- an unprecedented action no Republic of China (Taiwan) government has previously taken.

The decision, which means that the legislation will not be promulgated by the president, has sparked a major debate over whether Cho's actions are constitutional.

What is the legislation in question?

The legal amendments, passed by the Legislature, in which the opposition Kuomintang (KMT) and Taiwan People's Party (TPP) hold a majority of seats, would change how tax revenue is allocated between the central and local governments.

After the Legislature passed the amendments in November, the Cabinet requested a reconsideration, arguing that the changes could not be implemented. The request was rejected on Dec. 5, requiring the Cabinet to countersign the legislation and the president to promulgate it by Dec. 15, under normal circumstances.

(In Taiwan's system of government, requesting reconsideration of a passed bill is similar to a veto, but it can be overridden by the Legislature with a simple majority).

Why does the Cabinet oppose the legislation?

The Cabinet has argued that the amendments, which increase subsidies for local governments, would force the central government to borrow beyond the 15 percent legal borrowing cap in 2026, relative to annual expenditures.

Although the government's 2026 budget proposal has not, in fact, passed the Legislature, Cabinet spokesperson Michelle Lee (李慧芝) has argued that it would not be feasible to make such changes this late in the process.

Meanwhile, Chung Chia-pin (鍾佳濱), a member of the Democratic Progressive Party's (DPP) legislative caucus leadership, told CNA that refusing to countersign acts as a safeguard against a potentially unconstitutional law, as Taiwan's Constitutional Court is currently unable to conduct constitutional reviews.

Can the premier refuse to countersign a law passed by the Legislature?

The DPP thinks so. In a statement Monday, the party cited Article 37 of the ROC Constitution, which states that the president shall promulgate laws with the counter-signature of the premier.

It argued that the premier's act of countersigning is to "show responsibility" for the law (since the Executive Yuan implements the law), and that he can refuse to do so if he feels the bill is clearly unconstitutional or "difficult to implement."

In doing so, the premier bears corresponding political responsibility, since the Legislature can choose to pass a motion of no confidence against him, the DPP statement said.

However, this course of action is unprecedented and the KMT argues amounts to "manipulation" of the Constitution.

In a statement Monday, Lo Chih-chiang (羅智強), secretary-general of the KMT legislative caucus, cited Article 72 of the Constitution, which states that statutory laws passed by the Legislature should be promulgated by the president within 10 days.

What can be done at this point?

In its explanation of the legal basis for the premier's refusal to countersign, the DPP said that if the Legislature disapproves of Cho's decision, it can pass a motion of no confidence requiring him to step down.

The statement did not elaborate on the matter.

However, according to Article 2 of the Amended Articles of the Constitution, if the Legislature passes a no confidence motion against the premier, the president may, within 10 days, declare the dissolution of the Legislative Yuan.

After the dissolution of the Legislature -- which cannot take place while martial law or any emergency decree is in effect -- new Legislative elections must be held within 60 days.

Once the election results are confirmed, the new Legislature must be convened within 10 days, according to the article.

(Alternately, if the Legislature passed a motion of no confidence, the president could also choose not to dissolve the Legislature. In theory, he could then reappoint the premier and, pending some sort of legal ruling, continue to ignore the legal amendments).

A move to dissolve the Legislature has not happened under Taiwan's current constitutional framework, and would carry risks for all parties.

It also effectively requires the consent of each side, since the president can only declare the Legislature's dissolution after the Legislature passes a motion of no confidence in the premier.

Looming behind the dispute: Constitutional Court deadlock

In ordinary circumstances, Taiwan's Constitutional Court might be called in to resolve the dispute.

The court, however, has been largely brought to a standstill since Jan. 25, 2025, when amendments passed by the Legislature took effect requiring a minimum of 10 justices to hear and rule on a case.

That essentially immobilized the 15-seat court, which has only eight members left after seven completed their terms at the end of October 2024, and lawmakers blocked nominations to replace them.

The DPP has argued that the KMT is purposely paralyzing the court to avoid scrutiny of its legal amendments. The KMT, meanwhile, views the current court as politically biased, since all its members were appointed and confirmed when the presidency and Legislature were controlled by the DPP.

Is there any precedent for the premier's refusal to countersign?

Not on a bill passed by the Legislature.

In one case in 1991, however, then-Premier Hau Pei-tsun (郝柏村) refused to countersign a move by President Lee Teng-hui (李登輝) to promote his chief military aide to a higher rank, effectively blocking the move, lawyer Huang Ti-ying (黃帝穎) told CNA.

To prevent that from happening again, language was added to Article 2 of the Amended Articles of the Constitution allowing the president to appoint or remove the premier, or officials confirmed by the Legislature, without requiring the premier's countersignature, Huang said.

What happens if a budget is not passed by the end of the year?

According to the Budget Act, if a new budget is not passed by the start of a new fiscal year, spending levels for the current year are maintained.