How to finance sustainable service delivery in developing and transitional countries? Increase the local revenue collection!

Urbanisation is an undeniable global trend. By 2030, urban areas are estimated to house 60% of the world’s population. Of these urban inhabitant, 828 million people will live in slums, and the numbers are projected to keep rising. Cities are facing enormous urban challenges including tackling the impact of climate change, insufficient funds to provide basic services, the provisioning of healthcare and education, and to restore deteriorated infrastructure – all of which disproportionately affect the urban poor.

Given this context, it is easy to imagine that many people across the globe have no access to clean drinking water, their homes are left dark without electricity, and roads remain unpaved. Everybody knows, whether you like to pay them or not, that revenues from (local) taxes can fund the basic public services we all need. However, in many countries local governments only receive 10% to 20% of the revenues that could have been collected. This is a resource mobilisation gap up to 80% to 90%.

As highlighted by SDG 17, enhancing domestic resource mobilisation, by strengthening the ability of cities and regions to collect revenues, is an important enabler for governments to provide better and more accountable services to their citizens. With our taxation team, we strengthen tax administration in transitional and developing countries. Our services vary from managing the introduction of complete new taxation process (e.g. property rate collection in Ghana), or the introduction of a Fees for Water Management (Ethiopia), to decentralisation of property tax collection from the Ministry of Finance to the local level (Palestine Territories). Key feature of our approach is to link taxpayers tax liability to tangible expenditures in services, infrastructure and amenities through clear, effective communication. Doing so, we try to build a taxpayers climate that is built on trust in the local government. Our main clients are the Dutch Ministry of Foreign Affairs, the European Commission and the World Bank.

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More information: Siebe.stellingwerf@vng.nl, +31 6 10 84 47 74