Dr. Mihaly Kopanyi Municipal Finance Adviser, International Growth Center

 TA component in most urban investment programs (WB), or TA by bilateral donors;  Aim generally legal or IT frameworks, trainings;  Moderate revenue goals, moderate gains;  Improving national systems, incentivizing local governments with moderate own-source revenue (OSR) goals: cities in South Asia and Sub-Saharan Africa,  City level programs with big achievements: Cape Town, Dar-es-Salaam, Durban, Johannesburg, Kampala, Pretoria - Kuala Lumpur, Manila, Rio de Janeiro, Sao Paulo

 Private or Public OSR collection? ◦ Kampala switched from private to city level collection in 2011; Ghana started testing private collection after 2012;  Central or Local Collection? ◦ Tanzania tested centralized revenue collection but switched back to city level collection in 2014; Rwanda centralized OSR collection in 2014;  General Land Cadasters ◦ Vital & expensive improvements, but seldom feed Fiscal cadasters; (Kampala plans).  Property valuations ◦ Individual vs. Mass valuation–CAMA good results in transition countries (Lithuania) and Cape Town

Identify revenue sources Set revenue targets Adopt Action Plan w budget Set policies Issue byelaws Lobby for national laws Qualified staff Analyze Revenues Validate revenue sources Training of staff Communication Standard Procedures Update Databases Revaluation of properties Revenue IT modules Easy Payment systems GIS maps GPS equipment Urban cadaster CAMA

 First Generation Reforms ◦ FRAP, improvements in IT, contracts, databases; ◦ OSR increased from UGX10bn to UGX30bn  Second Generation Reforms ◦ OSR increased from UGX30bn to UGX80bn, 81% from 5 sources! ◦ City units collect all OSR! ◦ Qualified staff hired, remuneration improved ◦ Administrative procedures introduced ◦ Research and Business Analysis Unit established ◦ Databases enhanced, lots of payers identified ◦ Revenue IT modules improved ◦ Easy payment system introduced ◦ Tax-payer education, communication improved  Property rate UGXbn7.8 => UGXbn17.7  Road user fees UGXbn5.2 => UGXbn17.5  Business licenses UGXbn3.8 => UGXbn14.0  Local Service Tax UGXbn3.3 => UGXbn9.8  Ground rent UGXbn3.5 => UGXbn6.2  TOTAL OSRUGXbn30.4 =>UGXbn80.6

 Incomplete databases ( tens of thousands of payers are un- identified in various revenue bases );  Outdated property tax valuation roll 2005;  No new properties in tax net since 2009;  Disconnect btw planning and revenue departments ( Building permits and tax net disconnected );  No procedure to capture new properties;  Some internal rules and procedures are missing;  Weak framework for enforcement;  No penalties

 Third Generation Reforms ◦ Establishing Urban Cadaster; ◦ Revaluation of properties with CAMA ◦ Fiscal cadaster/database ◦ Issue SoP for all units and all revenues ◦ Fill the legal gaps by KCCA byelaws; lobby changing laws  Options to include in 3 rd generation reforms ◦ Change owner occupied exemption to value based exemption ◦ New revenue: development fee ◦ Taxing idle/undeveloped urban land (repeal exemption) ◦ Issue Revenue Policy Statements:  Declaring the mass valuation with objectives, dates, phases  Supplementary valuation every year;  Declaring tax properties beyond the primary residence  May declare rates annually after revaluation  Declaring exemptions e.g. value based, special for zones/slums

KCCA URBAN CADASTER Map Parcels, boundaries Buildings Infrastructure Superstructures Legal provisions NATIONAL LAND CADASTER Parcels, boundaries Legal provisions FISCAL CADASTER Land data, Building characteristic Valuation zones Valuation data, Tax data (rate, base, levies, arrears) Owners/users data Master plan, land-use plan, Zoning Subdivision consolidation Building permits, Licenses, CAMA Billing and revenue module