Chapter  One General Provisions

Article 1
The planning, compilation, review, formation and implementation of the budget of the central government of the Republic of China shall be governed by this Act.
The objective of the budget is to provide the government with the needed funds for completion of its operations within a certain period of time.
The compilation and implementation of the budget shall be based on financial management and observe the macro-economic balance principle.

Article 2
Revenues and expenditures initially estimated by each and every competent government agency according to its administrative plan shall be referred to as a "budget estimate"; a budget that has not gone through the legislative procedure shall be referred to as a "budget proposal"; a budget that has gone through the legislative procedure and announced shall be referred to as a "legal budget." The budget distributed for each and every government agency to conduct its implementation plan within the scope of a legal budget shall be referred to as a "distribution budget."

Article 3
The term "each and every government agency" shall refer to each and every agency at the central government level. The term "agency unit" shall refer to the main agency and its subordinate units; where there is no subordinate unit, the main agency itself shall be an agency unit.
The main agency as referred to in the preceding Paragraph shall be the competent agency of the agency unit.
Classification of agency units at all levels shall be determined by the central budget accounting and statistics agency.

Article 4
The term "Fund" shall refer to cash or other property collected or to be collected for use for a designated-purpose. The Fund is divided into two categories:
1. General Fund: refers to annual revenues for general-purpose use.
2. Special Fund: refers to annual revenues for special-purpose use, which is further divided into the following categories:
(1) Enterprise Fund: refers to the Fund for revolving business use.
(2) Debt Service Fund: refers to the Fund raised in accordance with statutory or contractual terms for the purpose of debt repayment.
(3) Trust Fund: refers to the Fund managed or disposed in accordance with contractual terms for the interest of domestic and foreign agencies, entities or individuals.
(4) Operations Fund: refers to the Fund to be used for any recoverable expenditure not for business purposes.
(5) Special Revenue Fund: refers to the Fund with a specific source of revenue and for specific-purpose use.
(6) Capital Project Fund: refers to the Fund for use in major public construction projects initiated by government agencies.
Management of the Special Fund may be stipulated by another law separately.

Article 5
The term "allocations" shall refer to the amount to be disbursed in accordance with statutory use and terms. The allocationscan be divided into the following three categories by the allowable duration of disbursement:
1. Allocations for Annual Expenses: shall refer to allocations to be disbursed within one fiscal year only.
2. Allocations for Continuous Expenses: shall refer to phased-in continuous allocations to be disbursed in accordance with the given terms or duration.
3. Allocations for Legal Expenses: shall refer to allocations to be disbursed annually during the duration of the specific law in accordance with the given terms.
The establishment, alteration or abolishment of the Allocations for Legal Expenses shall be set by law.

Article 6
The term "annual revenues" shall refer to all revenues during a fiscal year, excluding debt raising and revenues from the surplus from the previous fiscal year.
The term "annual expenditures" shall refer to all disbursements during a fiscal year, excluding debt repayment.
The difference between annual revenues and annual expenditures may be made up by government bonds, borrowing or the surplus from the previous fiscal year.

rticle 7
The term "Financial Commitment" shall refer to the case wherein the legislative authority authorizes the administrative authority to bear debt through juristic act for the national treasury during the current budgetary fiscal year and commit itself to disburse the expenses in the following fiscal years.

Article 8
The legislative authority may make a Financial Commitment to authorize disbursement of expenses in the next four fiscal years as required by government agencies.
The Financial Commitment as referred to in the preceding Paragraph shall be stated as a fixed amount in the budget.

Article 9
Probable disbursement in future fiscal years due to guaranty, surety or contract shall be described with tables in the budgetary statement; where it will have a material impact on the national treasury, the case shall be reported to the Legislative Yuan.

Article 10
The budget for annual revenues and annual expenditures shall, by the nature of revenues and expenditures, be divided into current accounts and capital accounts.
Annual revenues, except reduction in assets and recovery of investment that are capital revenues belonging to capital accounts, are all current revenues and shall be listed in the current accounts.
Annual expenditures, except addition or expansion, improvement of assets and increased investment that are capital expenditures belonging to capital accounts, are all current expenditures and shall be listed in the current accounts.

Article 11
Government budget shall be processed once each fiscal year.

Article 12
Government fiscal year shall commence from January 1 and end on December 31 each year whereas the current fiscal year shallbe given the title of the current calendar year of the Republic of China.

Article 13
Annual revenues and annual expenditures, raising of debt, use of the surplus from the previous fiscal year and debt repayment of the government shall all be compiled in the budget. Probable cash disbursement and Financial Commitment required during the fiscal year may also be compiled therein.

Article 14
The fiscal year for government annual revenues shall be determined as follows:
1. Where the period of an annual revenue account is defined clearly, the annual revenue shall be put under the fiscal year to which said period belongs.
2. Where the period of an annual revenue account is not defined, but a period for payment is given, the annual revenueshall be put under the fiscal year in which the payment period commences.
3. Where the period of an annual revenueaccount is not defined and there is no given period for payment, the annual revenue shall be put under the fiscal year in which the collection right arises.

Article 15
The fiscal year for annual government expenditures shall be determined as follows:
1. Where the period of an annual expenditure account is defined clearly, the annual expenditure shall be put under the fiscal year to which said period belongs.
2. Where the period of an annual expenditure account is not defined, but a period for disbursement is given, the annual expenditure shall be put under the fiscal year in which the disbursement period commences.
3. Where the period of an annual expenditure account is not defined and there is no given period for disbursement, the annual expenditure shall be put under the fiscal year in which the disbursement obligation arises.

Article 16
The budget may be classified into the following categories:
1. general budget.
2. unit budget.
3. sub-budget of a unit budget.
4. subordinate unit budget.
5. sub-budget of a subordinate unit budget.

Article 17
The general budget is the entire budget the government compiles in each fiscal year, covering annual revenues, annual expenditures, raising of debt, revenue from surplus of the previous year and debt repayment.
The annual revenues and annual expenditures of the general budget as referred to in the preceding Paragraph shall be compiled according to the overall annual revenues and annual expenditures of each unit budget and the annual revenues and annual expenditures of the subordinate unit budget which shall be included.
In the general budget and unit budget, except for the budget for the Special Fund, all items shall be classified as budget for the General Fund.

Article 18
The following budgets are classified as unit budget:
1. The budget of an agency unit with a legal budget in a government agency.
2. The budget for the Special Fund in which all the annual revenues and annual expenditures of the Fund budget shall be compiled into the general budget.

Article 19
The budget for the Special Fund, in which only part of the annual revenues and annual expenditures of the budget shall be compiled into the general budget, shall be classified as a subordinate unit budget.
Unless otherwise provided for by law, the Special Fund, which is subject to a subordinate unit budget, shall be governed by this Act.

Article 20
The budget compiled by the classification of agencies or Funds in a unit budget or subordinate unit budget shall be classified as a sub-budget of a unit budget or a sub-budget of a subordinate unit budget.

Article 21
The compilation procedure of the Special Fund established by the government shall be governed by this Act; provided, however, that revenues, expenditures as well as custody of the Special Fund shall be governed by regulations stipulated by the Executive Yuan and further submitted to the Legislative Yuan.

Article 22
The budget shall establish reserve funds, divided into the first reserve fund and the secondary reserve fund:
1. The first reserve fund shall be set under the unit budget of a government agency, which shall not exceed one-hundredth (1/100) of the total current expenditures.
2. The secondary reserve fund shall be set under the general budget, the amount of which shall be determined according to the financial conditions.
No reserve funds shall be used for any budget items deleted or budget amount cut down by the Legislative Yuan at the review unless used for Allocations for Legal Expenses or otherwise agreed upon by the Legislative Yuan.
Use of reserve funds in excess of NT$50 million each time by each and every government agency shall be subject to prior filing with the Legislative Yuan for reference, save those cases of emergency disbursement for calamities.

Article 23
Current revenues and expenditures of the government shall be balanced. Unless due to abnormal conditions in the budgetary fiscal year, capital revenue, government bonds and borrowing, as well as surplus from the previous fiscal year, shall not be used for current expenditures; provided, however, that if there is a surplus from the current revenues and expenditures, the surplus may be used for capital expenditures.

Article 24
Unless otherwise provided for by law, revenue from tax collection, service fees and revenue generated from implementation of control or other compulsory revenue shall be subject to the budgetary procedure as specified under this Act.

Article 25
The government shall not, outside of the scope of the budget, use public money or funds, dispose of public property or make investments.
Disbursement in violation of the preceding Paragraph shall be restituted in accordance with the provisions provided for in the Civil Code for management of affairs without mandate or torts.

Article 26
The procurement, sale or exchange of bulky movable property and real property of government shall be conducted pursuant to the budgetary procedure provided for in this Act.

Article 27
Unless provided for by law, the government shall not add extra debt outside the scope of the budget; provided, however, that treasury bills may be issued to balance short-term revenues and expenditures of the national treasury in accordance with the National Treasury Act.