No expenditure may be made by a government at any level except through requisite budgetary procedures.

Except as otherwise provided by other laws, the standards for planning, compilation, and common expenses with respect to the revenues and expenditures in annual general budgets, supplementary budgets, and special budgets at all governmental levels shall be in accordance with the Principles for Planning and Compilation of Central and Local Government Budgets adopted by the Executive Yuan.
When a local government fails to comply with the Principles for Planning and Compilation of Central and Local Government Budgets under the preceding paragraph, or when it is allowed by law to collect revenues from a particular source but fails to do so, its superior government shall consider reducing the budgeting or allocation of subsidies to that local government as merited by the actual circumstances; when a local government has a record of successfully developing sources of revenue, its superior government may consider increasing subsidies to it.

The expenses incurred by persons exercising political powers within the administrative regions of governments at all levels shall be borne by their respective governments.

The division of expenditures at various levels of government is as follows:
1. Expenditures arising from legislation enacted and administered by the central government are the responsibility of the central government.
2. Expenditures arising from legislation enacted and administered by special municipalities are the responsibility of the special municipalities.
3. Expenditures arising from legislation enacted and administered by counties and county-level cities are the responsibility of the counties and county-level cities.
4. Expenditures arising from legislation enacted and administered by rural and urban townships and township-level cities are the responsibility of the rural and urban townships and township-level cities.
If the matters under subparagraphs 1 and 3 of the preceding paragraph must be administered by a lower-level government, then except as otherwise provided by law, the expenses of administration for the delegated matters shall be borne by the delegating agency; for self-governance matters, expenses shall be borne by the given local government.
When the above matters are administered jointly by two or more governments at the same or at different levels, whether the central government or the governments of special municipalities, counties or county-level cities, or rural or urban townships or township-level cities, a proportional share of the cost of administration shall be borne respectively by the central government or by each respective special municipality, county or county-level city, or rural or urban township or township-level city.
When a local government at any level fails to bear expenses as required by paragraphs 2 and 3 above, its superior government may deduct those expenses from the subsidies it provides to the local government.

A local government shall give priority to funding for each of the following expenditures from its basic fiscal revenues and other recurring revenues:
1. The allotted number of persons on its staff and the personnel and related expenses officially ratified by a higher level of government.
2. General recurring expenditures, management and upkeep of public facilities, and expenses it is obligated to bear by law.
3. Expenses for basic local facilities or small-scale construction.
4. Expenses for other local matters that the local government is obligated to carry out.
When a local government, after complying with the provisions of the preceding paragraph, finds its revenues are insufficient for the required expenditures, it shall give priority to the above expenditures when using the centrally-funded tax revenues that have been allocated to it.

When the administration of matters by a government at any level is delegated to a government at the same or another level, the related expenses shall be borne by the delegating agency.

When a government or legislative body at any level enacts, adopts, or amends laws or self-governing regulations, and thereby reduces its revenues, it shall at the same time make sufficient plans for an alternative source of revenue; if it must increase its fiscal burden, it shall make sufficient plans in advance for related expenses, or, at the time of legislation, shall expressly provide for a corresponding source of revenue.