Start Date

30-10-2017 1:00 PM

End Date

30-10-2017 2:45 PM

Description

Awareness of the importance of domestic resource mobilization is growing. In 2015 40 countries signed the Addis Tax Initiative in which they declared their commitment to enhance the mobilization and effective use of domestic resources and to improve the fairness, transparency, efficiency and effectiveness of their tax systems. Also IMF, OECD and Habitat III emphasize the importance of a sound fiscal performance of municipalities as one of the most important factors to broaden participation, to stimulate growth of small and medium enterprises and to manage the global urban future. The challenges At the same time there is a general agreement on the many restrictions and constraints that local municipalities are facing to real substantial improvements: lack of appropriate strategies, absence of adequate systems for valuation and (property) registration, capacities, legal limitations etcetera. The outcome is that many countries are facing enormous tax gaps. In the African context these gaps can go up to 90% of potential revenues. Towards solutions To empower municipalities VNG International has developed a new modular methodology to support municipalities to take command again, and to improve both their tax collection and service delivery, thereby strengthening civil engagement and government accountability. The idea is that by helping municipalities to better mobilize their own resources they can be empowered to take command of their own development again. When municipalities gain the tools and knowledge needed to put their own resources to work, they can move closer to ending extreme poverty while providing the social services and infrastructure on which vibrant, safe, and healthy societies depend. Over the past few years the methodology has been implemented in municipalities in Ghana with impressive improvements in tax management, revenue collection and other improvements. Some examples: The municipality of Kadjebi has doubled their revenues in a year; - Elmina has increased its tax base for property tax 20 times; - To increase revenues out of market fees Kumasi successfully involved the so called market queens by negotiating with them which improvements they wanted to be in place in exchange for their help to collect revenues. - Ghana’s big harbour city Tema has been helped to become in control again by helping them to develop a strategy to partially replace expensive third parties which receive up to 30% of revenues collected. The strategy includes the use of the free VNG software to levy and collect local taxes. - Sekondi Takoradi has developed policies on revenue collection and ICT, which are being presented to NALAG (Ghana’s association of municipalities) so they can be used for all municipalities. The Methodology • Focuses on improving revenue collection, taxpayer communication, involvement of stakeholders, transparency of local governments and improved services; • Starts with an analysis of the situation in the country, region and municipality, followed by the development of a strategy to realize both improved revenues as quality of services. The strategy of the municipality and the stakeholders together describes the necessary improvements for the next years, the costs to realize them and the part of the expenses that can be paid out of increased revenues. The output is a social contract between municipality and the society. • Supports the municipality in the implementation of new tax procedures and processes, IT, necessary organizational changes and improved communication with taxpayers; • Is delivering hands on support with concrete output and outcome, as agreed in advance; • Part of the methodology is a fully operational IT solution, operated by qualified staff according to improved procedures, which guarantee increased revenues to invest in improved services; • Realizes communication trainings and advise for municipal staff to improve both mass communication as interpersonal communication. • Is a long term commitment to municipalities with support up to five years after the implementation of the IT solution and the new procedures; • For sustainability reasons local professional project organisation will be set up as well as support throughout the program or project.

Publication Date

October 2017

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Oct 30th, 1:00 PM Oct 30th, 2:45 PM

Why taxes matter

Awareness of the importance of domestic resource mobilization is growing. In 2015 40 countries signed the Addis Tax Initiative in which they declared their commitment to enhance the mobilization and effective use of domestic resources and to improve the fairness, transparency, efficiency and effectiveness of their tax systems. Also IMF, OECD and Habitat III emphasize the importance of a sound fiscal performance of municipalities as one of the most important factors to broaden participation, to stimulate growth of small and medium enterprises and to manage the global urban future. The challenges At the same time there is a general agreement on the many restrictions and constraints that local municipalities are facing to real substantial improvements: lack of appropriate strategies, absence of adequate systems for valuation and (property) registration, capacities, legal limitations etcetera. The outcome is that many countries are facing enormous tax gaps. In the African context these gaps can go up to 90% of potential revenues. Towards solutions To empower municipalities VNG International has developed a new modular methodology to support municipalities to take command again, and to improve both their tax collection and service delivery, thereby strengthening civil engagement and government accountability. The idea is that by helping municipalities to better mobilize their own resources they can be empowered to take command of their own development again. When municipalities gain the tools and knowledge needed to put their own resources to work, they can move closer to ending extreme poverty while providing the social services and infrastructure on which vibrant, safe, and healthy societies depend. Over the past few years the methodology has been implemented in municipalities in Ghana with impressive improvements in tax management, revenue collection and other improvements. Some examples: The municipality of Kadjebi has doubled their revenues in a year; - Elmina has increased its tax base for property tax 20 times; - To increase revenues out of market fees Kumasi successfully involved the so called market queens by negotiating with them which improvements they wanted to be in place in exchange for their help to collect revenues. - Ghana’s big harbour city Tema has been helped to become in control again by helping them to develop a strategy to partially replace expensive third parties which receive up to 30% of revenues collected. The strategy includes the use of the free VNG software to levy and collect local taxes. - Sekondi Takoradi has developed policies on revenue collection and ICT, which are being presented to NALAG (Ghana’s association of municipalities) so they can be used for all municipalities. The Methodology • Focuses on improving revenue collection, taxpayer communication, involvement of stakeholders, transparency of local governments and improved services; • Starts with an analysis of the situation in the country, region and municipality, followed by the development of a strategy to realize both improved revenues as quality of services. The strategy of the municipality and the stakeholders together describes the necessary improvements for the next years, the costs to realize them and the part of the expenses that can be paid out of increased revenues. The output is a social contract between municipality and the society. • Supports the municipality in the implementation of new tax procedures and processes, IT, necessary organizational changes and improved communication with taxpayers; • Is delivering hands on support with concrete output and outcome, as agreed in advance; • Part of the methodology is a fully operational IT solution, operated by qualified staff according to improved procedures, which guarantee increased revenues to invest in improved services; • Realizes communication trainings and advise for municipal staff to improve both mass communication as interpersonal communication. • Is a long term commitment to municipalities with support up to five years after the implementation of the IT solution and the new procedures; • For sustainability reasons local professional project organisation will be set up as well as support throughout the program or project.