Mozambique: Enhancing Municipal Revenues to Improve Service Delivery
What was the objective of the South-South exchange? : With the largest urban population in Mozambique, the capital city Maputo faces a continuous demand for municipal services. The city is aware that it must increase its own sources of revenue to ensure that services are provided in a sustainable manner. A primary challenge for Maputo has been to improve its tax base by continuously updating and expanding the property cadaster (registry of taxpayers). The twin-city exchange with Brazilian counterparts therefore focused on strengthening capacity to improve municipal tax collection and raise the revenues required for financing increased coverage and quality of municipal services, mainly in low-income periurban areas. Visits to Brazil by Maputo Municipal Council officials stimulated interest in learning from the experience of Brazilian municipalities in revenue administration.
In September 2012, Maputo Municipal Council officials and technicians traveled to the State of Parana in Brazil to meet officials of the state government and to visit two municipalities with similar characteristics and challenges. Brazilian officials from Paranacidade visited Maputo on four subsequent occasions to provide on-the-job training and technical assistance. Through joint fieldwork, the methodology used in Brazil was refined and adapted to the reality in Maputo. After six months of cooperation with Paranacidade, in March 2013 Maputo Municipal Council implemented piloted fieldwork with 30 interns to test the new methodology on the rapid expansion of the property cadaster. After a positive experience, the exercise was repeated with 60 mid-level technicians from July to October 2013. Monitoring primarily came through regular progress updates and assistance via e-mail and videoconferencing. Overall, the program benefited 80 municipal employees, including 17 technicians and municipal staff of the Department of Revenue, and 60 mid-level technicians in charge of fieldwork.
There is now a positive trend in property tax collection in Maputo. As a result of this cooperation, Maputo Municipal Council has managed to reach all its yearly targets agreed in the Bank-financed Municipal Development Program that set up an overall increase of 300 percent through the five years of program implementation (2011-2015). Going forward the Council is committed to making property taxes the main source of municipal revenue and thus a pillar of financial sustainability.
With the support of Paranacidade, Maputo Municipal Council has been able to update and/or add more than 25,000 properties to its cadaster, reaching a total of 57,000 properties. At the moment, the cadaster covers almost the entirety of the main urban core of the city (that includes most of the high-value properties). The Council now plans to expand its cadaster to the suburban planned neighborhoods and to the unplanned neighborhoods near the city core.
After the completion of knowledge exchange, Maputo Municipal Council and Paranacidade expanded their memorandum of understanding to ensure the continuity of this technical assistance that will now go until mid-2016. The costs for the cooperation have now been fully taken by the Council.