September 04, 2013
Through May 2013, the town of Chaghcharan in Afghanistan collected more property taxes than any time in its history. During April and May 2013 alone, revenue from property taxes increased 1,150 percent compared to the whole of 2012.
The boost for the municipality was due largely to a new database system and awareness campaign.
Prior to 2012, Chaghcharan lacked any kind of property registration system. Municipal staff visited properties infrequently and failed to update their tax rate for many years. Instead, citizens paid a flat rate regardless of their house size or value. As a result, collections remained low and the municipality lacked the budget to provide better public services.
Supported by the DAI-led Regional Afghan Municipality Program for Urban Populations, Regional Command West (RAMP UP West), which is funded by the U.S. Agency for International Development, officials began in July 2012 to survey and register all 4,137 residential properties in the municipality. After that task was complete in March 2013, new rates were developed based on the properties’ size, location, and condition.
In April and May of this year, the project launched a collection awareness campaign, going door-to-door to talk to citizens about their new tax bill and encouraging them to pay.
What happened next surprised the revenue collection officials. “Normally, we have one visitor each day to pay tax but now 30 to 40 come to the Revenue Department every day,” said a collection officer named Qadir.
“I was doubtful this awareness campaign would work,” said Chaghcharan Revenue Manager Mohammad Hussain, looking at people filing into the municipality to pay their taxes. “Previously we sent municipal staff door-to-door to push people to pay the small fixed amount and they never paid. But after the property registration and the awareness campaign, 14 percent of municipal residents paid their taxes in just two months even though the tax rate increased.”
With the increased activity, the municipality hired three more revenue staff to collect taxes in the future without RAMP UP West support. With all properties registered, transparent rules in place, and citizens informed on the regulations, the municipality more easily collects the tax, and property owners now know how much they should pay and receive a receipt.
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