Despite several great revolutions of local government in the Republic of China, the power of local taxation and finance has still made no progress. The main problem which must first be solved is the vertical division of the power of Public Revenues and Expenditures Determination. Although the power of the provincial government has been abolished by Amendment of the Constitution, it still leaves two problems that we have to solve. One is the taxation power for villages (including towns and cities), and another is the taxation power for aboriginal peoples. We shall construct a better environment for the power of Public Revenues and Expenditures Determination to avoid fiscal crisis at local governments.