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A key challenge for many newly federalized / decentralized systems across the world is providing an adequate and clear legal basis for the administration, collection and enforcement of own source revenues (OSR), including local taxes and non-tax fees and charges. Own-source revenues are an important element of the financial eco-system for sub-national governments (SNG), as this income:
The basis and rules for allocation and distribution of Provincial and local own-source revenues have been set in the Constitution, the Local Government Operation and Management Act, the Intergovernmental Fiscal Arrangement Act (IFAA) and potentially in other legislation which may clarify specific issues related to certain taxes (for example, in the 2018 Finance Act).
Certain taxes and non-tax fees and charges have been defined as exclusive to the Federal, Provincial or Local Level, while others have been defined as concurrent (see Tables 1a and 1b in the Annex). In additional to a clearly defined legal and regulatory basis, it is also necessary for SNGs to have adequate personnel, systems, reporting, documentation, and oversight to actually collect the own-source revenues for which they have policy and administrative responsibility. They also need to be record and transmit those revenues sources that are shared between the Palika and Provincial level.
Provincial and local governments have been given authority over the setting and collection of their defined local taxes and fees and are responsible for adopting local legislation to implement their own-source revenue mobilization powers. Further, in the case of shared taxes, the collecting entity is responsible for ensuring transfer of the appropriate share to other government levels (see table 2, below).
Objectives of the Study
Against this backdrop, Sajhedari- STF Project intends to carry out a study to understand the overall context for Own Source Revenues (OSR) of the project’s two partner Provinces (Province No.5 and Sudur Pashchim Province) and partner Palikas. The study aims to develop the basic underlying status of own-source revenue policy development, administration, collection and enforcement in order to define a program of support to project partner provincial and local governments in improving their OSR mobilization through the development and implementation of Revenue Improvement Action Plans (RIAPs).
The study should carry out the following analysis:
1. Strategic review of Provincial and Palika tax and fee ordinances/decrees:
2. Review of provincial or local communication/information about tax/fee regulations, payments and enforcement processes to taxpayers.
3. Data analysis of tax/fee collections since 2018 (overall and by source of revenue)
4. Review of RIAP for those sample pikas that have prepared this action plan, including
5. Review of data status of tax bases and the process for updating these tax bases for key property/land taxes.
6. Analysis of systems for tax and revenue collection (staff, organization, communication, documentation, reporting).
Based on the findings from these analyses, prepare recommendations for a targeted approach to support partner Palikas / Provinces. The recommendations would help to inform support on the preparation of Revenue Improvement Action Plans (RIAP), with a focus on the top two or three revenue sources, and which could be considered as “low-hanging fruit”.
The analysis should also help identify any policy, legislative, administrative or procedural gaps that inhibit local revenue generation.
The researcher / consultant is expected to provide the following reports and analysis, prepared in collaboration with the Urban Institute’s Senior Local Government & Municipal Finance Specialist:
The report should contain graphs, case studies and pictorial representation of situation to the extent possible and it should provide complete and authentic citations using Vancouver or Harvard Methods of Referencing.
Level of Effort and Timeline
The expected level of effort to conduct the study is expected to be between 30-40 days starting from October 2020 to January 2021. The level of effort (no. of days) will be negotiated after submission of inception report.
The consultant is required to visit provincial headquarters and selected Palikas of Sudur Pashchim and Province-5, in accordance with ongoing CoVID-19 restrictions or requirements. The travel cost including for accommodation and food will be covered by the project as per the rules for travel and per diems.
Reporting and Coordination
The consultant will report to the Policy and Research Lead and will liaise with project team members and consult at all key steps with the sub-contractor/partner, Urban Institute, during the carrying out of the study. As required, weekly or bi-weekly update meetings will be held.
Required Qualification and Skills
Qualified candidates are requested to submit a cover letter along with updated CV to [email protected] with subject line “Study on Own-Source Revenues” by October 30, 2020. Please indicate your ability, availability and daily rate to undertake the terms of reference above.