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    Local Government Finance Notes

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    Ba Nya
    This document discusses several topics related to local government finance in Africa, including: 1) The drivers of decentralization in Africa in the late 20th century including failures of central governments, economic crises, and pressure from donors, civil society, and private sectors. 2) The types of revenue available to local governments, including grants from central governments, local taxes and fees, and donor grants. 3) Key aspects of mobilizing local revenue, such as registering tax bases, conducting assessments, collecting taxes, and challenges like political interference and inadequate personnel.

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    Local Government Finance Notes

    Uploaded by

    Ba Nya
    39 views23 pages
    This document discusses several topics related to local government finance in Africa, including: 1) The drivers of decentralization in Africa in the late 20th century including failures of central governments, economic crises, and pressure from donors, civil society, and private sectors. 2) The types of revenue available to local governments, including grants from central governments, local taxes and fees, and donor grants. 3) Key aspects of mobilizing local revenue, such as registering tax bases, conducting assessments, collecting taxes, and challenges like political interference and inadequate personnel.

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    class notes on financial statistics

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    This document discusses several topics related to local government finance in Africa, including: 1) The drivers of decentralization in Africa in the late 20th century including failures of central governments, economic crises, and pressure from donors, civil society, and private sectors. 2) The types of revenue available to local governments, including grants from central governments, local taxes and fees, and donor grants. 3) Key aspects of mobilizing local revenue, such as registering tax bases, conducting assessments, collecting taxes, and challenges like political interference and inadequate personnel.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    39 views23 pages

    Local Government Finance Notes

    Uploaded by

    Ba Nya
    This document discusses several topics related to local government finance in Africa, including: 1) The drivers of decentralization in Africa in the late 20th century including failures of central governments, economic crises, and pressure from donors, civil society, and private sectors. 2) The types of revenue available to local governments, including grants from central governments, local taxes and fees, and donor grants. 3) Key aspects of mobilizing local revenue, such as registering tax bases, conducting assessments, collecting taxes, and challenges like political interference and inadequate personnel.

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    Local Government Finance

    Dr Yeko Mwanga
    Decentralisation in Africa
    • Failure of centralised public sector management
    which gave way to economic, fiscal and political
    crises on the 1970s and 1980s.
    • Decline in state resources increased pressure for
    economic, institutional and political reforms as
    part of the search for new paradigms of
    governance.
    • Pressure from non-state actors like civil society
    and private sector for space to influence decision-
    making and get more involved in public affairs;
    Decentralisation in Africa (Cont..)

    • Pressure from external donors to establish


    leaner and efficient bureaucracies;
    • Decentralisation was used by ruling groups
    to neutralize or seek compromises with local
    elites;
    • Pressure from the globalisation which
    compelled many national governments to
    focus their attention on strategic issues of
    national economic and political management
    Revenue Mobilization
    What is Local Revenue?
    • It is income collected and received by
    a local government.
    • Local governments collect, record
    control and account for revenue
    • Local governments finance their
    development projects, pay salaries,
    allowances and other costs
    Types of Local Government Revenue
    • Grants from central government
    • Local revenue
    • Grants from donors
    Sources of Local Revenue
    • Local Service tax
    • Property tax
    • Fees
    • Rents
    • Interest
    • Charges
    • Cess on produce
    • etc
    Main activities in revenue mobilization
    • Registration
    • Enumeration
    • Assessment
    • Collection
    • Sensitization and publicity
    • Enforcement
    General consideration in revenue
    mobilization
    • Adequacy
    • Elasticity
    • Equity
    • Administrative capacity
    • Political Acceptability
    • Economic impact
    Legal framework for revenue mobilization
    • Article 152 and Article 191 of the
    Constitution of the Republic of Uganda
    • Section 78 & 81 of the Local Government
    Act
    • Local Government (Rating) decree, 1979
    • Trade Licensing Act 1969
    • Public Health Act, 1994
    • Employee Guidelines
    Key Stakeholders in Local Revenue
    Mobilization
    • Chief Administrative Officers/Town Clerks
    • Chief Finance Officer
    • Revenue Collectors/ Cashers
    • Executive Committees
    • Councils
    • Local Government Public Accounts
    Committee
    • Local Government Finance Committee
    Registration, Enumeration, Sensitization of Key
    Stakeholders in Local Revenue Mobilization

    • Identification of tax bases,


    registration, enumeration and
    sensitization of tax payers
    • Update of revenue databases
    • Tracing of tax defaulters
    • Accurate and reliable assessments
    Assessments

    • Tax assessment committee conducts tax


    assessment
    • Tax assessment committee issues certificates
    of assessment to tax payers
    • Assessment forms are used by tax assessors
    • Assessors keep records
    • Tax payers have a right to appeal
    • Against a tax liability
    Revenue Collection

    • Stationary used
    • Revenue received and recorded
    • Documentation
    • Revenue registers
    • Tax collection records
    • Banking of revenue
    Revenue Collection Challenges

    • Political interference
    • Corruption
    • Relays in collection
    • Insecurity
    • Inadequate personnel
    • Distrust
    Good practices in Revenue Collection

    • Privatization
    • Collection teams
    • Incentives to revenue collectors
    • Involvement of community leaders
    Donor Mobilization

    • Funds and technical assistance


    – Supervise project implementation
    – Good governance procedures
    – Technical assessment
    – Capacity building
    Main Donors

    • EU
    • DANIDA
    • DFID-UK
    • African Development Fund (ADF)
    • IDA
    • UN
    • etc
    Local Service Tax

    • Constraints
    – Lack of data
    – Unregistered business
    – Corruption
    • Good practices
    – Computerised registers
    – Use of a electronic system for tax collection
    – Direct payments by tax payers
    – Employers remit t local governments for employees
    Property tax

    • Tax on commercial and industrial buildings and land, its


    imposed on the rental value of the property or capital value
    of property
    • Constraints
    – Obsolete legislation
    – Lack of registers
    – Corruption
    • Good practices
    – Sensitization
    – Privatization
    – Computerization
    Markets and other revenue sources –
    rent, permits, dues, cess etc.
    • Constraints
    – Informal markets e.g. evening markets
    – Unregistered traders
    • Good practices
    – Fence market areas
    – Privatization
    – Computerization
    New Challenges facing decentralisation
    and local governance
    • The lingering culture of centralisation
    • Conflict in local governments
    • Inadequate financing of local governments
    • Inadequate capacity of local governments to
    delivery services
    • Incoherent policies on signalling
    recentralisation vs. decentralisation
    • Corruption, bribery, and unethical behaviours
    New Challenges facing decentralisation
    and local governance (Cont..)
    • Unemployment and unprecedented spread of
    both rural and urban poverty and informal sector
    • Climatic change issues
    • Environment, equitable management of natural
    resources
    • Intra and cross-boarder conflicts armed conflicts
    and insecurity
    • Voices of the poor, marginalised groups not heard.
    Decentralization in Uganda
    • Has it contributed to poverty reduction?
    • Has it decentralization led to improved service delivery?
    • Has it contributed to good governance?
    • Has contributed to affective engagement of non-state
    actors and private sector?
    • Are local authorities autonomous?
    • Has accountability and transparency of local
    governments improved?
    • Have the inter-governmental fiscal relations improved?
    • Has it contributed to effective sharing of functions and
    responsibilities?

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