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PILGAN

PILGAN. Vanuatu ( Shefa ) and Kiribati sustainability analysis & LED initiatives. Shefa Financial sustainability analysis . Shefa financial sustainability focus areas : Revenue enhancement D ebtor management. Shefa Revenue Enhancement. Property tax – fixed rate vs unimproved capital

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PILGAN

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  1. PILGAN Vanuatu (Shefa) and Kiribati sustainability analysis & LED initiatives

  2. Shefa Financial sustainability analysis Shefa financial sustainability focus areas: • Revenue enhancement • Debtor management

  3. Shefa Revenue Enhancement • Property tax – fixed rate vs unimproved capital • Business licenses – reviewed / new by-laws • Sin Tax – Kava Bar (social costs) • Nuisance tax – small taxes too costly to collect • Benefit based tax – many initiatives were documented

  4. Shefa Debt collection • Invoicing - all by mid-Jan • Discounts for early pmts • Interest charged for late pmts • Demand notice • Amnesty - drafted by CLGF • Press releases - drafted by CLGF

  5. Impact Review • Analysis was done in November 2014 • Reviewed in February 2014 Easily achievable recommendations implemented: debt collection, compliance enhancement and introduction of some benefit based taxes via newly enacted by-laws.

  6. Shefa Impact • Revenue base of the council increased by about 20%. • Cashflow collection up 35% by Mid feb 2014. • Reduction of debt by about 40% • Strong action against illegal and unapproved submission • 3 such subdivisions have been given notice and asked to regularize the development(payment arrangements have been made)

  7. Kiribati • Financial compliance and sustainability • Revenue enhancement • Debt management

  8. Kiribati – Council Issues • Manual system • Incomplete rate payer records • No rate payer listing • No Debtor listing • No invoicing • No regular follow-ups • Lack of reconciliation's • Lack of compliance to accounting practices and tax laws

  9. Kiribati Financial Compliance • Segregation of duties (undetected error/fraud) • Cash collected to banking reconciliations • No financial information available • Total reliance on MIA • Lack of source documents

  10. Kiribati Tax compliance • New Value added Tax (VAT) and Excise tax laws passed by parliament with effect from 1/4/2014 • MIA, TUC and BTC unaware of these tax implications • Confusion between VAT and profit tax • General impression that councils are exempt from VAT

  11. Kiribati Action Plan • Compliance to law - awareness and training o VAT • MYOB and Billing system Implementation and training for TUC, BTC and KUC • MYOB Implementation and training for MIA • Server with 3 thin client computers for each institution • MOU with USP and KIT for continuous training on MYOB, LG financial management

  12. Other funding opportunities • A fully developed strategic plans (Plan, M&E & costing) for Shefa, Torba, Penama – Vanuatu; Funafuti council – Review; MIA & KUC – Kiribati as a marketing tool for funding. • Developed the concept paper for funding from Usaid under the climate change program – prospects of about USD500k. • KILGA will also be assisted for Usaid concept paper

  13. Sustainability through LEDinitiatives • Financial system can play a pivotal role in promoting LED • LED growth will enable councils to earn more revenues • LED growth will reduce the social cost • LED may reduce costs – outsourcing e.g. rubbish collectors • LED will contribute directly to the multiplier effect

  14. TenkyuTru • Thank You • VinakaVaka Levu • Dhanyavaad • TangiuTumas • KoRabwa • Kommol Tata

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