What is needed

Due to insufficient capacities local governments in many countries face a resource mobilisation gap up to 80% or 90%. This effects the basic service delivery tremendously. Bridging the tax gap and increasing service delivery is only possible when two preconditions are met:

  1. First and foremost, a trustworthy and accountable local government must be in place. To increase revenue collection and improve service delivery, accountable local governments – ones that understand their main task as delivering good services in a customer-oriented manner to their citizenry – need to be in place.
  2. The second and equally important component is the citizens. It is crucial that they understand the importance of a constructive dialogue with their local government and are stimulated to participate and contribute to their city’s or regions planning and prioritisation processes.

One of the most effective, just and fast methods to levy local taxation is the introduction or improvement of a form of property tax.
Some of the challenges faced by (local) governments in establishing a functioning property tax process are:

  • Absence of property registration and an updated valuation of properties.
  • Inability to access information about property valuations due to the high cost of these services.
  • No reliable databases (e.g., absence of street names or property addresses) to make billing and collection efficient.
  • Handwritten bills, which is time consuming and can result in revenue leakages.
  • Uneven leadership commitment and political interference that hinder revenue mobilisation and collection.
  • Local government employees receive no training programmes pertaining to data collection, bill delivery, debt management, communications and social skills.