For the second consecutive year, the 12 partner municipalities assisted by the USAID Planning and Local Governance Project have increased their revenues by more than 30%.
Throughout 2017, the USAID Project partner municipalities’ revenues from local taxes and fees rose to 14.6 billion ALL, up by 30.2% when compared to 2016. This is the second consecutive year of an excellent performance of the USAID Project partner municipalities. During 2016, these municipalities increased their revenues from taxes and fees by another 33.4% when compared to 2015. Unfortunately, the remaining 49 non-partner municipalities have increased their revenues from taxes and fees by only 3.2% in 2017.
The outstanding performance of USAID Project partner municipalities did not happen on its own. It requires serious commitment from local policymakers, resources and support. Since 2012, the USAID Project has been working together with its partner local government units to address systemic weaknesses and establish the building blocks for effective revenue administration at the local level. Efforts have been concentrated in establishing the necessary capital infrastructure, in building capacities of tax administrations, and in running taxpayers’ awareness campaigns. Based on this conceptual framework, the USAID Project has supported its partner municipalities to implement property tax collection action plans to collect information and bill all property owners; create tax registers based on Geographical Information Systems (GIS); employ a computerized Tax Administration Information System; build capacity for local tax administrators; and finally run tax awareness and education programs targeted to both business and household taxpayers. A combination of these measures has helped the 12 USAID Project partner municipalities to overcome their structural weaknesses and excel in revenue generation and administration when compared to the other 49 Albanian municipalities.
It should be noted, however, that, while very important for local budgets, the transfers from the national government will always be limited compared to the municipalities’ needs and citizens’ preferences for more and better services and economic development opportunities. Therefore, local governments should put more emphasis in improving the collection of local taxes and fees from all local taxpayers. It is expected that the recent reforms undertaken by the Government of Albania to establish a national register of taxpayers will help Albanian municipalities, particularly the remaining 49 non-partner municipalities that have not yet received assistance in establishing building blocks for effective local tax administration.
The USAID Project will continue its support to partner municipalities to further improve local tax administration and work with national and local policymakers on the reform of the property tax system.