During its seven years of work, the USAID Planning and Local Governance Project has supported the municipal finance and tax administration departments/staff of its partner municipalities by providing technical assistance, capacity building workshops, on-the-job training, and demand-driven guidance. This assistance sought to enhance their technical capacities to improve public finance management at the local level, expand their tax base so as to boost generation and mobilization of own source revenues as well as to develop alternative methods to increase own source revenues.
The USAID Project has continued its support to partner municipalities in building local capacities in light of the Territorial Administrative Reform (TAR), which necessitated the transfer of responsibilities to be accompanied with adequate resources and expanded empowerment of local governments to raise own source revenues and to allow LGUs to improve services, maximize good governance and efficiency, and empower local governments and their citizens.
At the national level, by the end of 2017, the GoA advanced work on reforming the property tax policy moving to a value-based system of building taxation. More importantly, the efforts are being made to establish a national fiscal register linking properties with taxpayers. On March 7th, 2018, MoFE finalized the new methodology on building taxation.
Introducing a national database for building tax purposes along with the application of the new methodology will help unify the use of the methodology and strengthen the system across municipalities. Given the huge responsibilities of local government units in this process, the short notice of entry into force of this policy, and the immediate need of local officials to familiarize themselves with the application of this methodology, the USAID Project has already started work providing technical support and practical advice to local officials of partner LGUs in understanding and implementing the new methodology on property tax.
In response to MoFE’s request and municipalities’ need for clarification on the new methodology, the USAID Project partnered with the MoFE’s General Department of Property Tax in delivering a cycle of three training sessions to managers and representatives of tax departments from municipalities across the country to present the new methodology, solicit direct feedback on the methodology, learn their concerns on its application, and share lessons learned and best practices in properly applying the new methodology on building tax and maximizing its value.
Held in Elbasan, Fier and Lezha during April, the three regional training sessions were very well attended and participants were eager to learn more about this new, challenging methodology.
The training resulted in local tax administrators’ improved understanding of the recent legal changes on the property tax on buildings and fiscal cadaster, identified local governments’ needs for future training and technical assistance, and enhanced the dialogue and consultation between local government units and MoFE on the implications of the property tax reform.
With particular focus in enhancing technical skills and improving systems on administration of local revenues, the USAID Project experts prepared a model guideline/regulation to assist LGUs on the procedures to be followed in administrative appealing processes of local taxes, including property building tax. This guideline will serve as a model to all municipalities across the country as they adapt their internal regulations on tax appealing procedures at the local level.