Computerized municipalities
have better collection rates

No connection between

municipality size and collection rate

The collection rate of direct municipal taxes reached 62 percent in fully computerized municipalities, 58 percent in partially automated municipalities, and 38 percent in municipalities that are not automated.

According to a recent survey by Consultation and Research Institute (CRI), the collection rate is linked to municipalities’ capability to track Rental Value Fee (RVF) payment, which is the number one direct income source for municipalities.

The survey was conducted as part of the Support to Municipal Finance Reform – Capacity Building Component, funded by the European Union.

The survey included a sample of 57 municipalities of different sizes and locations. Interviews were also held with three municipalities that have a high collection rate. The municipalities are Zouk Mikael, Jdeideh, and Zahlé

The United States Agency for International Development (USAID) equipped all 57 municipalities with revenue systems ten years ago.

However, the survey's results indicated “the systems are not used in a unified way among municipalities, and the automation of other operations such as expenditures, budgeting, and documentation, differ from one municipality to another.”

The survey also showed that there is no connection between the size of the municipality and the success rate in collecting RVF. The main challenges facing municipalities are the level of poverty among residents and understaffing.

The survey said: “Using automation schemes does not necessary requires purchasing new equipment or complicated software and maintaining it. It is sufficient to have unified, organized, and easy-to-use schedules in municipalities that do not use USAID’s revenue systems.”