The role of ICT in delivering efficient revenue collection in developing countries: The Tanzanian experience Prof William McCluskey, African Tax Institute, University of Pretoria Chyi-Yun Huang, World Bank Patrick Doherty, Consultant Prof Riel Franzsen, African Tax Institute, University of Pretoria Land and Poverty Conference 2017: Responsible Land Governance—Towards an Evidence-Based Approach March 20-24, 2017 Washington, DC

Key Issues to be addressed Challenges of revenue collection Role of ICT LGRCIS Importance of data/information Arusha revenue collection Sustainability

Manual systems; largely paper based The Main Challenges faced by Local Administrations Manual systems; largely paper based Documents are prone to unlawful duplications Management of documents is difficult Revenue lost due to leakages Payments in cash Incomplete and inaccurate registers Poor revenue budgeting and forecasting Revenue collectors have to report manually

The Need to Change BUT………………... Ensure maximum voluntary compliance. The vision is to transform the administration system to: Make it simpler, quicker and hassle free for taxpayers and businesses Make the process less labour intensive and less cumbersome Improve the service offered to clients BUT………………... Ensure maximum voluntary compliance.

An Information Communication and Technology System (ICTS) is: a business process that assists in the collection, storage, organization, communication and use of data and information.

Revenue Collection: Enhanced Compliance 6 BILLING COLLECTION ENFORCEMENT DELIVERY STRATEGY IMPROVE SERVICE IMPROVE ENFORCEMENT MAKE IT AS EASY AS POSSIBLE FOR THOSE TRYING TO COMPLY MAKE IT AS HARD AS POSSIBLE FOR THOSE TRYING TO EVADE OR AVOID PAYING THEIR FAIR SHARE ENHANCED COMPLIANCE Key to this approach is ensuring that taxpayers/traders understand their obligations

The main revenue sources of Local Government in Tanzania DESCRIPTION Service levy Property tax Billboards o/w Parking fees Income from sale or rent Market fees and charges Secondary school fee Licenses and permits on business activities Hotel levy

The current problems in revenue collection Corruption Manual Processing Poor Planning Frameworks Outdated Information Revenue Collection leakages

Local Government Revenue Collection Information System (LGRCIS) Objectives: Be able to collect and report revenue on a real time basis Geographically locate all taxpayers/properties Be capable of allowing multiple payment modes (Mobile money, banks, PoS, etc.) Be able to allow for integration with other systems such as banks Allow for intelligent reporting and analysis Produce secure receipts and licenses which cannot be forged Allow citizens transact easily with the LG.

Tanzania Strategic Cities Project Total: 451,065 buildings Mwanza, 82,000 Arusha 102,904 Tanga 47,439 Kigoma 42,535 Dodoma 59,420 Mbeya 100,298 Mtwara 16,869 Colours represent density of buildings

LGRCIS is an Integration with: -Human resources information system - Document and file management system - Revenue collection system

Core Data Collection Satellite imagery is acquired and processed; roads and buildings digitised Undertake systematic fieldwork to collect other details (e.g. Occupier, use, age, etc) Building a comprehensive database to support revenue collection

Initial Data from Aerial or Satellite Images

Buildings and Roads updated and captured into a GIS Database…

Arusha Digitised Buildings (102,904 buildings)

Identification of Building and Taxpayer -(ARU007001) -USAGE -STATUS OF THE BUILDING) - LOCATION/BLOCK OWNER

Property and Building Characteristic in-field Data Collection Multiple attributes are collected, inc Ownership Use (commercial/residential, etc) Age Condition

Core Field Data Collection in Detail Every building will have: An ID Owner/occupier information Lots of physical attributes (age, sanitation, water, condition, etc) Units and use of each Photograph

Arusha City Council: Revenue Performance

General Benefits A fully-populated, functioning LGRCIS will present the opportunity for: Transparent billing and collection: cashless society Improved confidence by taxpayers Professional approach to local revenue generation and collection Robust decision making Improved budgeting and revenue forecasting Transparent and efficient taxpayer monitoring using GIS Reliable ways of paying for services (bank transfer, mPesa, etc.) Dependable receipted transactions for all services

The Challenge: One of Sustainability Capacity building and training of staff Core data collection processes Development of LGRCIS Role of PoRALG Reliability of the system; internet connectivity Integration of GIS Development of partnerships with banks and mobile money operators Taxpayer education

LGRCIS was nominated and subsequently was one of the winners for… Finally…………… LGRCIS was nominated and subsequently was one of the winners for… 2016 Bank-wide Innovation Award 2016 (6 winners out of 168 nominees) 2016 KNOWbel Awards (9 winners out of 254 nominees)