TOPIC

A REVIEW OF THE INTERNAL REVENUE RESOURCES OF

HETAUDA SUB-METROPOLITAN CITY

Presented ByMahendra Chapagai

Roll No.-17Nepal

DISSERTATION PRESENTATION

• Introduction ……………….• A brief country profile

• The review of the related literature • Analysis, interpretation and presentation of the data

• Recommendation and conclusions• References

OUTLINE OF THE DISSERTATION

INTRODUCTION• Decentralization is the vehicles to reduce poverty and

inequality in both rural and urban sector• Municipal governance is a part of local governance• Deals with needs of every citizen to solve day to day

problems• As closer as possible to people to solve local problems• Two-tier local governance modality• LSGA provides powers, roles, duties and responsibilities• Functions (finance, water & sanitation, education & sports,

Transport & work, physical development, health etc.)• Revenue collection is one of the main functions of local

governments.• Internal income and external income

STATEMENT OF THE PROBLEM• People migrate from rural to

urban pressure on service delivery.

• Municipality function area broad

• Public demand high• Challenge of good governance

Internal Revenue for• Salaries to retirement

benefits• Admin cost • Service delivery and fulfill

the development needs

• MCPM indicator (19) local resource mobilization• Recently upgraded to sub-metropolitan city

Problems• Absence of elected political leaders,

• lack of revenue action plan, • lack of human resource planning and development,

• Lack of maintaining revenue records

OBJECTIVES OF THE STUDY

To review the utilization of the internal revenue resources of municipality.

General Objective

Specific Objective

To study the trends of the internal income status of Hetauda Sub-Metropolitan City.

To identify the problems and challenges in internal revenue resources mobilization.

To provide suggestions as well as recommendation in resource mobilization and its utilization.

Primary Data

Secondary Data

METHODOLOGY

presented on tables, charts and graphs with the help of MS-Exel

Experience

Local body financial administrative regulations, 2007,

Previously carried out researches, thesis related to the study, different articles, journals, reports, and books related to the study

SIGNIFICANCE OF THE STUDY

• Useful as a reference material for related researches

and studies,

• Beneficial to the municipality revenue forecasting,

• Annual budgeting process,

• Revenue action plan,

• Increase the internal income

• Provide better service and quality

• Hetuda Sub-Metropolitan City,• Income & expenditure year 2009/2010 to 2013/2014

LIMITATIONS OF THE STUDY

Brief Country Information

• Federal Democratic Republic of Nepal• Landlocked Country, Birth Place of Buddha• Highest Point Mount Everest (worlds 8 tallest

Mountains out of 10)• Capital & Largest City- Kathmandu• Official Language- Nepali (44.6% use as mother tongue)• Location: South Asia• Area: 147181 Sq. Km. • Neighbors: China: at North India: at South, East and West• Population: 26,494,504 (26.49 million) Male: 48.50% and Female: 51.50%• Currency- Nepalese Rupee• Life Expectancy- 66.16 Years (Male=64.94, F=67.44)• Average Family Size- 4.9• Annual Population Growth- 1.35%• Caste/Ethnics= 125• Languages= 123• Religions= 10

Nagar Panchayat – 1969 Municipality - 1991Sub-Metro - 2014 Population - 1,52,903 (2011) M=74,982 F= 77921Area - 261 sq.km.Household - 34270Pop. Growth Rate- 2.36 (2011)Total Ward - 29Industrial Area - 70 (running factory)Total Employees – 215Departments - 5Sections - 13

Hetauda Sub-Metropolitan City

ORGANIZATION CHART OF THE MUNICIPALITY

• Local Self Governance Act, 1999• Local Self Governance Regulation, 1999• Local Body Financial and Administrative Regulations, 2007

Legal Background/Framework of Revenue Mobilization

Internal Income/Revenue Resources1. Local Tax (Land Revenue and Tax, Home and Land Tax, Rental Tax,

Enterprise Tax, Vehicle Tax, Integrated Property Tax, Entertainment Tax, Advertisement Tax)

2. Service Charge/fee (Vehicle Parking Fee, Valuation of Real Estate, Local Development Fee, Other Service Charge etc.)

3. Fee (Registration and renew fee, Approval of Building Design Fee, Approval and Recommendation Fee, Relationship Certified Fee etc.)

4. Sale5. Resource Mobilization (PPP and others)6. Interest, Principal, Bonus and Profit 7. Other Income (Fine & Penalty, Rent income….. Etc.)

Income status of the municipality

ANALYSIS, INTERPRETATION & PRESENTATION

Expenditure status of the municipality

Contribution of internal income on total income

Contribution of internal revenue resources

Five main revenue resources

35.41%13.37%

11.44%

7.96%

5.55%

OTHER FINDINGS• Revenue and technology• Human resource planning and

development(1 officer, 2 senior assistant, 4 office

assistant, 17 office helper )

• Database system• Good governance & Transparency

(Tax payers orientation, monthly press meeting, regular reporting, citizen charter, best tax payers award,……..)

• MCPM and internal income

Problems in municipal revenue resources mobilization

• Financial delegation is not fully decentralized• Grant transfer lacks transparency (38.73% decreased in 2012/2013)

• Absence of elected political representatives since 2002• Lack of evaluation and monitoring from central • Lack of revenue action plan• Lack of human resource planning and development• Weak database system• Lack of coordination between stakeholders• Lack of motivation to the employees• Increased rate of administrative cost• No networking between revenue and GIS• Few tax payers orientation program

RECOMMENDATIONS

• Placement of elected representatives• Fully fiscal decentralization• Establish local government development bank• Regular facilitation and monitoring by central

government• Promote performance grant system with clear policy• Focused on capacity development, infrastructure dev.,

information system and coordination to the municipality

RECOMMENDATIONS

• Revenue action plan• Reduce the admin cost• Regular tax payers orientation program• Data collection and update• Power delegation to the ward level• Review and monitoring • Human resource planning and development• Link GIS & approval of building design section

with revenue section• Expenditure should be reliable and

transparent

CONCLUSIONS

• Engine of the economy• Provides administrative, economic , social services as a

means of decentralization• Municipality can play a vital role in nation building process

through efficient mobilization of local revenue resources• Municipality has been mobilizing both sources of revenue

in order to meet the growing needs and expectations of local inhabitants.

• Internal sources of revenue are more stable and consistent

• The existing capacities of municipality in terms of revenue mobilization have to be improved

Higher the revenue collection, higher the serviceHigher the service, higher the revenue collection