Addressing leakages in revenue mobilisation: KMA joins ASToN to achieve objective
The vision of the Kumasi Metropolitan Assembly (KMA) to digitise its revenue mobilisation for a more effective management of local public finances looks very realistic with the city joining the African Smart Towns Network (ASToN).
ASToN is a network of 11 African cities committed to use digital tools to address local and global challenges as pertained to their specific localities and contexts. The aim of creating an alliance and partnership between the participating cities is for them to rapidly become leading digital players in their respective local contexts, in an appropriate and sustainable manner.
The three-and-a-half-year project seeks to help African local authorities to make the most of digital, data, and technology. The project hopes to achieve this by creating a local dynamic through local action groups, framing of clear problems to address using digital and tech as well as developing a Local Action Plan. The programme is financed by the French Development Agency (AFD), managed by the French National Urban Renovation Agency (ANRU) and inspired by the URBACT European programme.
The KMA initially settled on mobility and wanted to digitise mobility in Kumasi. However, through discussions, the focus of the assembly changed from mobility to revenue mobilisation.
The reason behind this evolution according to Randolf Wilson, the local coordinator of the ASToN project, was that the assembly realised that most often when projects start with implementation funds but there are no forthcoming funds, the assembly is not able to continue implementing the projects as initially planned.
Under the e-tax project, there is a lot of tax revenue the assembly aims to collect. They include property rates, daily tolls, transport tolls, building permits etc.
The first assignment within ASToN was the preliminary research. This was to paint a picture of the local context when ASToN started. “We look at how revenue was collected, stored and also reported. It was realised that the assembly was using manual means of generating demand notice,” Wilson said.
The demand notice, he explained was a bill generated to a taxpayer for them to pay. The bill states the amount of money to be paid, the period and other things. All of this manoeuvre was being done manually.
The preliminary research identified that revenue collection could not be traced effectively due to challenges induced by the manual collection. Indeed, some revenue collectors could under-report the money collected or connived with tax payers, especially traders, to pay less than the required tax. Hence, revenue collectors are unable report on a weekly or monthly basis and generate accurate reports.
As a result, the assembly is not able to use these data inform decisions and projections. The assembly cannot achieve either its revenue targets annually. “The manual way of doing things made it difficult for us to get accurate data for planning and management and even for implementation of activities done,” Wilson said.
Even if the assembly was able to take any decision, Wilson added that, how to implement those decisions became a challenge.
“So, these were the things that we found out when we organised the preliminary research and we saw a myriad of challenges and issues that were confronting the revenue collecting efforts,” he said
From this work, a team was set up including staff from the KMA as well as other agencies involved in revenue collection such as the Ghana Revenue Authority (GRA) and the Land Commission.
Their task was to assist in the preparation of an action plan, elaborate a communication plan and prepare to experiment a small part of the solution.
Now, the KMA is at the experimental stage. The local authority decided to try its solution in Nhyireso, a community in the metropolis.
Wilson said the ASToN project had brought to the fore the need to go digital. He added that the KMA was leveraging an app developed by the German Development Agency for data collection of property rates which are being used by all assemblies in Ghana.
With the ASToN project moving forward, Wilson said the prospects looked promising. The project would help build a reliable data base and adopt an e-tax system to enhance revenue mobilisation. Furthermore, it would be easier to use technology in collecting and reporting on revenues.
ASToN has been running for the past three years would end in December 2022.
To know more about the project and Kumasi’s work, visit aston-network.org
Written by Afedzi Abdullah.