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Financial Resource Management
One of the most serious
obstacles to municipal effectiveness in the past was the
failure on the part of most municipalities to collect taxes
as allowed by law. Before implementation of the municipal
reform program, approximately 10% of municipalities
published announcements in the Official Lebanese Gazette as
required by law prior to tax collection indicating that
taxpayer lists for rental value taxes (a major source of
directly collected revenue) were available.
Utilizing the standardized systems and procedures developed
as part of the program, municipalities are now able to
collect taxes in an efficient, consistent, and legal manner
with opportunities for tax evasion and corruption minimized.
An indication of advanced use of the systems and procedures
developed and implemented under the program, more than 600
municipalities generated automated annual financial
statements in 2006.
Current program activities are designed to enable
municipalities to continue to expand the taxpayer base and
revenues through implementation of existing tax and fee laws
and through the identification of income in neglected
sectors. Installation of the Municipal Geographic
Information System (MGIS) in major municipalities is an
important part of the project designed to enhance the
taxation, inspection, and auditing capabilities of the
targeted institutions enabling further enhancement of
revenues to be achieved.
Municipal revenues have
increased significantly throughout Lebanon as a result
of the ability to efficiently and effectively collect
taxes. Total directly collected revenue for current and
previous years’ in a broad sample of 570 municipalities
(excluding Beirut due to the scale of revenue there) in
Lebanon rose from $42.0 million in 2003 to $55.2 million
in 2005 representing a cumulative increase of 31%.
Directly collected revenue in Beirut
Municipality in 2005 totaled $57.6 million reflecting a
significant decline in the demand for building and
reconstruction permits compared to previous years and an
overall weak economic situation. These results, however,
followed substantial increases in previous years with
directly collected revenue rising 47% from $40.9 in 2004
to $59.9 million in 2005. This revenue expansion was
achieved as a result of a number of factors including
heightened demand for building and reconstruction
permits as well as assistance activities that supported
1) the identification of neglected income in sectors
such as billboard and advertising licenses, 2) better
management of taxpayer data, and 3) internal
efficiencies leading to an improved collection process.
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