Municipal sector review
Locally Raised Revenues and Population Size
Download 0.72 Mb.
|
- Navigate this page:
- Table 4.2 Local Revenues and Municipality Size (% of local revenues; US$ collected per resident)
- A: Local Taxes and Fees
- Subtotal local taxes and fees
- B: Business and enterprise
- Subtotal business and enterprise
Locally Raised Revenues and Population Size4.4 The reliance on locally generated revenues, expressed as their share of total municipal revenues, goes up with the size of the population of the municipality with one important exception (Table 3.2). The very large cities – those with populations exceeding 500,000 – are the least dependent on self-generated revenues. 4.5 It is the second-to-largest group of cities, those with populations between 300,000 and 500,000, that rely the most on locally raised revenues. They also show the heaviest reliance on the real estate and the environmental sanitation taxes and on other taxes and duties. The reliance decreases with population size, but even the smaller towns are more reliant on their own revenues than the very large cities. 4.6 Municipalities of all sizes depend more on publicly owned business and enterprise revenues rather than on local taxes and fees. These businesses range over a number of activities such as gas companies, ferry services, bakeries and nurseries. The biggest cities are the most dependent on the business and enterprise activities as they generate 70% of local revenues. The medium sized cities (populations between 100 and 500 thousand) are the least dependent as close to half of their local revenues come from taxes and fees. 4.7 The major source of local revenues depends on the size of the municipality (Table 4.2). In the larger municipalities, the focus is to raise income from business and enterprises. The bigger cities have significantly greater per-capita revenues generated by local business activities and enterprises than the others, especially in the area of property management (rent or sale). One surprising finding is that the mid-sized towns have smaller per-capita revenues in this category than the smaller towns. In the larger municipalities, collection of real estate and cleansing collection taxes and other duties is of secondary importance, especially since the locally generated funds represent a relatively small share of total municipal revenues. 4.8 Real estate tax revenue per capita is the highest in the mid sized towns, even though land and house prices should be higher in the bigger cities. Similarly, per capita collections of the environmental sanitation (i.e. garbage collection) tax are higher in the mid sized towns than in the big cities. Per capita duties and contributions paid for infrastructure go up as the population size goes down. Residents in the smaller towns pay more than both residents in mid sized and big cities, and collections per capita are the lowest in the biggest cities. High per capita collections of “other taxes” in the big cities more than compensate for their low collections in the other categories. Here, electricity and communications taxes yield significant revenues in the larger urban areas. 4.9 The inability of municipalities to fully collect local taxes and duties is a concern. The political willingness to fully collect taxes and duties should be demonstrated before additional resources are to be collected at the local level. Thus, the willingness and ability of municipalities to collect additional resources should be tested extensively before reforms in local tax collection are implemented.
Download 0.72 Mb. Share with your friends:
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||