Framework for a Strategy of UP Revenue/Resource Mobilisation ...

probably be paid more than the 15% commission. It might also reduce the motivation to collect.
Thus, it is recommended that UPs continue to employ collectors on commission, but review
how the incentives can be augmented.
i) Spot checks by the UP Chairman or Secretary to see whether there is fraud by collectors (e.g.
not giving a receipt or giving a fake receipt). For example, selective follow-up visits to the
houses visited by collectors would reveal any fraud if households say that they have paid but do
not have a proper receipt. Rotating collectors between wards part way through the year could
have the same effect, but that would only be possible if there were several collectors.
j) Prompt follow-up action where people have not paid. Households should be visited at least one
a month for the first three months of the financial year until they have paid what is due.
k) After three months (i.e. end of September), compiling and displaying a list of defaulters (e.g. on
the UP notice board and/or in other public places), or putting notices on the houses or
defaulters; this should have the effect of shaming non-payers into paying. It would also help to
reveal any fraud by collectors or collusion between households and collectors.
l) Motivating people to pay through public information campaigns at ward and UP level,
explaining how developments already completed under LGSP-LIC and other programmes are
threatened by people not paying their tax. Such meetings may carry more weight if supported by
the UNO, so the UP Chairman should solicit the help of the UNO. People’s willingness to pay
can also be increased through opportunities to participate in decisions about how resources are
to be used (e.g. budget prioritisation meetings), and where there is confidence that the taxes
collected are used properly, through increased transparency about resource use.
m) As a last resort, taking enforcement action against those who can afford to pay but who refuse to
pay. Initially this may take the form of a letter from the UP Chairman to give the signal that it
sends to other people is that the UP is serious about collecting tax. Hopefully, that will induce
other defaulters to pay up.
n) In the case of business tax / licences, the UP should prepare a comprehensive list of all
businesses in the UP. This will require field inspection, and can be cross-checked against the
holding tax register for non-domestic properties (ideally, using the same plot number and/or
taxpayer identification number in both registers to facilitate cross-checking). The type of
business should be recorded, together with the size category (consistent with the classifications
in the suggested Model Tax Schedule – Table 2), and the amount payable. All business,
commercial and professional activities that are covered by the Model Tax Schedule should be
listed, including NGOs.
16