This section examines the structure of revenue and expenditure of the Municipality. The main sources of revenue to the district can be categorised into internal and external revenue sources. In general, the internal revenue sources are used to cover recurrent expenses of the Municipal Assembly. This leaves the central government grants and donor funds as a main source of funds for development or capital expenditure.
This section assesses the revenue and expenditure pattern of the Dormaa Municipality. Local Revenue Structure
The sources of revenue to the Dormaa Municipality have been classified into three major categories:
• Internally Generated Fund (IGF) eg. Licences, rates, rents fees and fines.
• Transfers from Central Government including DACT, HIPC and GETfund.
• Donor Funds
• Other Inflows.
Over a period of three years, revenue from external sources continues as the major source of revenue to the district. Between 2003 and 2005, the external sources along accounted for an average of 87% of the district’s revenue. Over the same period IGF increased slightly as compared to external sources. Poor performance of some of the internal revenue items could be assigned to this reason. This level of performance is an indication of over dependence of the district on external sources for project implementation.
The expenditure pattern of the Dormaa Municipali can be divided into capital and recurrent aspects. The capital expenditure includes those incurred mostly under the restricted revenue items such as DACF, HIPC, CWSA, DFID, and GTZ among others. The common capital expenditure items include those on the construction of educational, health, water and sanitation facilities.
Another striking feature is the expenditure on personal emolument. This expenditure head though recurrent in form is incurred by the central government in the form of salaries which is also restricted.
Besides the central government transfers for emoluments, the Assembly spent about % to % of its IGF on personal emoluments within the period 2003 – 2005. These funds were used to pay additional staff employed by the Assembly.
Performance of Revenue Items (2003 – 2005)
The major sources of Internally Generated Fund of the Municipal Assembly include lands, fees, fines, rates and rates investments among others. Out of these sources lands and licences have been the highest contributors to the IGF between 2003 – 2005. These two items accounted for 53%, 63.6% and 65.7% respectively. This indicates that some of the revenue items are not productive enough and therefore need re-assessment and total up dating of the district tax register. The major components of these items are farm produce, rates, entertainment.
Some of the revenue items experienced some increased over the 2003 – 2005 period. For instance revenue from licences increased from 9.8% in 2003 to 15.5% in 2005. The increment experienced in some of the revenue items can be attributed to rate increases and the tapping of new revenue sources. For instance, the increase of revenue from lands was as a result of the increase in stool lands revenue inflow whilst increased revenue from licences (12.7 in 2003, to 15.5% in 2005) was a result of the widening of the tax net to cover new sources such as the kiosk owners and property rates. To ensure realistic revenue targeting and co-operation of the payers, there is the need for continuous broad-based participatory approach to fee fixing.
Challenges in Revenue Mobilisation
Most of the sources are unproductive or are low yielding, and capacity of revenue collective is low in terms of skills and logistics. Most taxable concerns still remain outside the district’s revenue books. At the moment, with technical support form GTZ, the District Assembly is in the process of putting up measures to step-up the collection of property and economic activities rates.
Refer to pdf file for table.