Revenue Enhancement Plan

of
Baglung Municipality
(FY 2016-2020)

Urban Governance and Development Program: Emerging Towns Project

(UGDP: ETP)

Supported by:

Government of Nepal
Ministry of Urban Development
Department of Urban Development and Building Construction
Project Coordination Office – UGDP/ETP

November, 2015

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Document Control

Document Revenue Enhancement Plan of Baglung Municipality

Title
Prepared by UGDP
Team Technical Team, Municipal Support Team, UGDP
Members
Checked by Project Coordination Office, DUDBC
Initial draft April, 2015
Final draft November, 2015

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 Contents
1 Introduction .................................................................................................................................... 5

2 Revenue Enhancement Plan ...................................................................................................... 5

3 Objectives ...................................................................................................................................... 5

4 Methodology .................................................................................................................................. 6

4.1 Approach ................................................................................................................................. 6

4.2 Limitation ................................................................................................................................ 6

5 Major Sources of Municipal Revenues ..................................................................................... 6

5.1 Integrated Property Tax (IPT)............................................................................................. 6

5.2 Building Permit Fee .............................................................................................................. 7

5.3 Business Tax......................................................................................................................... 8

5.4 House Rent Tax.................................................................................................................. 10

5.5 Toll Tax ................................................................................................................................ 10

5.6 Vehicle Tax (Annual) ......................................................................................................... 11

5.7 Local Market Tax (Semi Annually) ................................................................................... 11

5.8 Other Taxes......................................................................................................................... 12

5.9 Property Rental ................................................................................................................... 12

5.10 Recommendation Fees ..................................................................................................... 13

5.11 Parking Fees ....................................................................................................................... 13

5.12 Other Fees and Charges................................................................................................... 13

6 Revenue Administration of the Municipality ........................................................................... 14

7 Municipal Revenue - Historic Trends ...................................................................................... 15

8 Municipal Revenue Projection for Next 5 Years in 'Business As Usual' Scenario ........... 17

9 Main Findings .............................................................................................................................. 18

9.1 Taxes.................................................................................................................................... 18

9.2 Fees and other charges .................................................................................................... 18

10 Revenue Enhancement Plan of Baglung Municipality ...................................................... 19

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11 Revenue Projections of the Municipality ............................................................................. 24

12 Costs and Benefits of the Revenue Enhancement Plan .................................................. 28

Annex 1. Situation of Municipal Revenue of Past fuve Years (NRs ‘000’) .................................. 30

Tables

Table 1 Number of new registrations for BT in 2013-14 and 2014-15 .......................................... 9

Table 2 Local Markets and Revenue ................................................................................................ 11

Table 3 Municipal Revenue Situation ............................................................................................... 15

Table 4 Growth Rate of Main Sources of Municipal Own Source Revenue ............................... 15

Table 5 Municipal Revenue Projection for Next 5 years in 'As Usual Business'........................ 17

Table 6: Revenue Enhancement Plan .............................................................................................. 19

Table 7: Assumptions for Revenue Projection based on Revenue Enhancement Plan ........... 25

Table 8: Municipal Revenue Projection with Revenue Enhancement Plan ................................ 26

Table 9: Net Benefits of Revenue Enhancement Plan, FY 2015-20 ........................................... 28

Table 10: Net Benefits of REP in Major Three Revenue Sources, FY 2016/17-2019/20 ......... 29

Figure
Figure 1 Share of Major Heads of Own Source Revenue in FY 2014/15 ................................... 17

Figure 2 Net benefit from implementing REP ....................................................................................... 29

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1 Introduction

Baglung Municipality lies in the Baglung District of the Dhaulagiri Zone in the Western
Development Region of Nepal. It was declared as municipality in 1997 A.D. with merger of three
Village Development Committees – Kalika, Mulpani and Laharepipal. Balung Bazar is situated on
a plateau overlooking the Kali Gandaki gorge. The municipality is situated 72 km west of Pokhara
and about 275 km west of the capital city, Kathmandu. The municipality ranges above 805 metres
to 2100 metres from the sea level. The city’s landscape has very few plain areas and most of the
areas are downsided hills. The total area of the municipality covers 19.23 sq km.
The municipality is divided into elevan wards. Major settlements of the municipality are in ward
numbers 2 and 3 which is the major commercial hub of the city. The major settlement areas are
all in the form of chowks and lanes. Dhaulagiri Chowk, Shiva Chowk, Jeep Park, Mahendra Path
are some of the richly settled areas of the city.As per the population census report 2011 (2068
BS), the city has a population of 29,360 and the population growth rate is 2.8%. In the re-election
of constituent assembly member (April 2015) estimated 52,000 voters out of which 38,000 voters
participated in the re-election.
Major economy consists of Agriculture; accrding to survey conducted in 2008 (2064 BS) 42.06%
people are engaged in agriculture. The second largest occupation of the people is govt. & non
govt. employment which consists of 30.03%.

2 Revenue Enhancement Plan

Baglung municipality is one of the six municipalities selected for the Urban Governance and
Development Program: Emerging Towns Project (UGDP-ETP) by the Government of Nepal and
supported by the World Bank. The project aims to improve the capacity of the participating
municipalities to plan, implement and fund urban development activities. For strengthening
municipal capacity, the essential steps are to assess the existing revenue situation, and develop
a strategy to improve municipal revenue mobilization capacity. Therefore, Baglung municipality
has prepared the Revenue Enhancement Plan with the support of UGDP technical team, using
the previously prepared Revenue Improvement Action Plan as a basis.

3 Objectives

The main objective of the Revenue Enhancement Plan (REP) is to improve the revenue
mobilization potential for Baglung municipality and identify activities for the improvement of own-
source revenues, with a time bound set of actions for implementation. The following activities
have been carried out as part of the preparation of the REP:

a. Identify potential for revenue generation by assessing the current status of own-source
revenue sources, and past trends of municipal income and expenditure.
b. Prepare revenue enhancement plan for improving own source revenue potential.

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 c. Projection of income for the next five years based on the estimation of the improvement in
municipal own source revenue as a result of implementation of the REP.
d. Determine the increased spending capacity of the municipality as a result of the increase
in own-source revenues as the basis for annual allocation of O&M expenditure and
formulation of investment plans.

4 Methodology

4.1 Approach
In the process of preparation of plan the annual financial statements of last five years, the yearly
budget document of current year, the earlier Revenue Enhancement Action Plan and various
decisions made by municipality and revenue projection committee have been reviewed. The data
collection format has been developed and the plan has been prepared on the basis of information
received from municipal staff and data from municipal records. Further, consultations were held
with officials From March, 2015 to end of April 2015 as an input to the preparation of the Plan.
Finally, a municipal level workshop was organized on 31st May 2015 to discuss the preliminary
draft of the REP. List of participants is given in Annex.

4.2 Limitation
As the plan is of one small municipality various national economic, political as well as social events
are out of control and the plan may be affected. Since the plan has been prepared based on
various assumptions listed the outcome of the plan may be affected if there is alteration in those
assumptions.

5 Major Sources of Municipal Revenues

Analysing the historic trend and the last fiscal year’s own source collection of the municipality,
there are 4 major own source revenues.Integrated Property Tax stands highest at 26%, Building
Permit Fee at 19%, Business/Professional Tax at 12% and Recommendation Fees at 11%. The
following section describes the main components own-source revenues, including local taxes and
services fees. The focus of the discussion is on current status, main issues and recommendations
to increase revenue potential.

5.1 Integrated Property Tax (IPT)

The Integrated Property Tax (IPT) was introduced in the municipality in fiscal year 2013-14 (2070-
71) which replaced House and Land Tax. It is one of the major sources of own source revenues
of the municipality, accounting for 36 percent of total own-source revenues in FY 2014/15. There
are 6,769 tax payers registered in the municipality, who have submitted their property details
(land, house and other structures built in their land). Although the exact number of total taxpayers
is not known, an estimation of 12,000 tax payers was made during the implementation of IPT in

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2013-2014. However, recent developments suggest that there may be around 10,000 tax payers
in the municipality. The record shows that 3939 tax payers paid their property tax to the
municipality in the fiscal year 2014/2015. The figure comes to be just 58.2% of the total number
of tax-payers.

As per the provisions of Local Self Governance Regulation regarding the revaluation of the rates,
the IPT rate has been remained same for the current fiscal year. However the municipality has
tied the value of property with the valuation rates of Land Revenue Office therefore in line with
increase in value of land the taxable amount of IPT has also increased for fiscal year 2014-15.
On average the IPT collection in value from the taxpayer has increased in the range of 10-15
percent since the last fiscal year. For property tax administration, the municipality has established
a computerized software program developed by a private vendor. There is a provision of 10%
fines on late payment of IPT for the current fiscal year and above 1 year arrears are charged with
20% flat fines. The municipality also provides 10% rebate to taxpayers paying within mid of
January (End of Poush). There is a provision of felicitation for the highest tax payers which the
municipality has been continuing since the last fiscal year, the first year of IPT implementation.
The highest taxpayers in the municipality are Nepal Telecom which pays 138,500 and an
individual who pays 137,238 (shiva kumar Pradhan) annually.

Key Issues
 No provision of 5 years review policy on rate increment.
 Tax slabs over 10 Million worth.
 The property database is not fully updated and lacks information on newly built houses,
additional storeys and sub division of the land plots.
 Integrated property tax billing system has not been introduced.
 Risks related to computer software such as data security, maintenance and possible data
transfer mechanism.

Recommendations for Improvement

 Collect land plot information from the Land Revenue Office.
 Conduct field survey to update the property and building information.
 Issue IPT bills at the beginning of each fiscal year for all and take special steps for
collections from the larger tax payers.
 Carry out a study of security, use and maintenance needs of the IPT software and
implement security measures.
 More scientific approach in setting up rates besides basing it completely on the Land
Revenue Office’s Property Valuation rates.
 Introduce progressive link of collection of property tax with development activities.

5.2 Building Permit Fee

The Building permit fee is one of the major sources of municipal own source revenues, accounting
for 16 percent of total own-source revenues in FY 2014-15, with an annual growth rate of 9
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percent over previous five years. The manual records show that, 156 taxpayers paid the building
permit fee in 2014-15 out of which only 111 took the permission in last FY; however software
shows that 211 people paid building permit fees during FY 2014-15. The municipality has fixed
the fee rate based on size, storey and construction type of buildings. It was noted that the
municipality has revised the fee for fiscal year 2014-15 since after 5 years. Up to 2011 there are
1749 permits issued by the municipality. The current no of households are 7848 within
municipality. The situation exists because several of the houses were built before formation of the
municipal authority.
As lesson learnt by the recent earthquake, building permit fees can have additional categories
such as soil testing and designs. Additionally the national building code can be supplemented by
providing services to general public on the methods of using earthquake resistant techniques (e.g.
Basic, Base Isolation and Vibration Control)

Key Issues
 The municipality is not revising the rate of building permit fee annually
 Provisions for rebate to bring old houses in the tax net have not been implemented.
 Adding new storeys or building a new house more than permitted.

Recommendations for Improvement

 Increase the rate of building permit fee annually.
 Revisit the discount provisions on building permit fee for old houses.
 Provision of 100% annual monitoring of houses that have paid building permit fee.
 Intigrate provision of municipal services and payment of building permit fee.

5.3 Business Tax

Business Tax is another important source of own-source revenues in the municipality, accounting
for 13 percent of total own-source revenues in FY 2014/15. Baglung is a densely populated small
city with all kind of shops in most of the lanes, alleys and chowks. The municipality has established
a counter at the Local Chambers of Commerce building for the collection of Business
Tax/Professional Tax and has assigned 1 staff for the purpose. At the moment business tax is
collected manually, however a software has been developed by a private vendor and the
municipality is in the process of implementing the software. The average annual increase in
Business tax revenues over the last five years is 10%. As of the last fiscal year 2014-15, there
are total of 2,337 businesses registered in the municipality. Out of them 147 new businesses were
registered in the fiscal year 2014-15. Furthermore the municipality has classified business rates
in 18 broad categories but manually records registrations of businesses into just 5 categories. For
the collection of business tax, a team of municipal staff visits the businesses annually and collects
the taxes (mid April to mid July) and on an average 81% of the total business/professional tax is
collected during this door to door business tax collection. There are some businesses in the
municipal record, which were registered in the municipality and now they are closed. There is a
provision of 10% discount for early payment (within first 3 months of starting of the FY) and fines

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for the late payment (after the end of the fiscal year). Below is the number of new registrations for
the FY 2013-14 and 2014-15.

Table 1 Number of new registrations for BT in 2013-14 and 2014-15

Nature of Business FY 2013-14 FY2014-15

Retails Shops 57 49
Clothing and Accessories 9 10
Hotels 7 17
Meat Shops 7 7
Others 67 91
147 174
Total business registered 2337

Key Issues
 Lack of information as majority of business operators are still going to the municipality intead
of the LCCI office for the payment of tax.
 Mentality of business owners who are from the surrounding areas refrain from paying the tax
as they would not require any services from the municipality.
 Phychologically large business owners are willing to pay fines rather than paying taxes on
time
 Some of the businesses operating in the municipal area are not yet registered in the
municipality.
 The tax rate can be made more scientific.
 Manual Tax Database which is not updated as many of the registered businesses are closed
and the trend of the general public who register business only for loan provision.
 Manual tax administration system is being applied for Business Tax collection and accounting.
 There is no system to inform tax payers about their tax dues to the municipality.

Recommendations for Improvement

 Conduct field survey to update Business Tax database including information of investment,
annual transaction and nature of Businesses
 Computerize the business tax information and provide training to municipal staff for its
operation
 Issue Business Tax bill at the beginning of each fiscal year and issue notice to the large- tax
payers for the payment
 Update Business Tax database by taking out businesses which are closed or the owner died
or they changed type of business
 Strong co-ordination with LCCI to bring the non residential business owners in the tax net.
 Awareness and advertisement campaign to inform about various aspects of the business tax.
Use of SMS based information system.
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 Base the tax categories and rates on multiple matrixes, definite unit of measures and social
impacts of the products.

5.4 House Rent Tax

As per the legal provisions, a house-owner has to pay a rent tax equivalent to 10% of rent income
to the central government and 2% to the municipality. There is significant potential to increase
revenue collection through house rent tax, although currently it has provided very limited
contribution to the municipal own-source revenues. The municipality has a record of just 52 bills
of House Rent Tax were issued by the municipality in the fiscal year 2014/15 and most of these
houses are rented by corporate houses. Apart from this municipality also collects House Rent Tax
from Tenants during providing recommendations. Fiscal year 2013-14 witnessed a massive
increase of 470% compared to the fiscal year 2012-13 and FY 2014/15 33% increase over last
financial year, the credit goes to income valuation as the trend of abroad studies/work/migration
is at the peak which requires documents proving various sources of revenue and rent being one
of them.

Key Issues
 Dual Tax collection mechanism ( 10 % Inland Revenue Office and 2 % municipality)
 Municipality needs a database of rented houses.
 Low compliance of house rent tax.
 Lack of coordination with Inland Revenue office to extract the information about rented
houses.

Recommendations for Improvement

 Prepare database of house-owners who have rented out their houses for corporate/business
use in coordination with the Inland Revenue office.
 Prepare database of rented houses for residential purpose through field survey.
 Determine minimum rate for house rent based on area, road size and house type.
 Integrate rented houses' information with the Integrated Property Tax software.
 Revise the collection mechanism and base it on revenue sharing modality with Inland
Revenue Office.
 Establish billing system of house rent tax by combining it with the Integrated Property Tax.

5.5 Toll Tax

There are 4 roads where the municipality is collecting toll tax. The municipality had collected
NRs. 85,500 from the road in FY 2014/15 contracting private party for revenue collection. The
four tolls are: Ring road (2), Mid-Western Highway to City Ringroad (1) and Deurali to Bhakunde
(1).

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5.6 Vehicle Tax (Annual)
The municipality has contracted the collection of vehicle tax to a private party for 125,000/- for the
current fiscal year. Records of Transport Management Office shows, there are total of 4,389 two
wheelers and 397 four wheelers registered in Baglung municipality. In the last fiscal year 2014-
15 2,930 vehicle owners have paid vehicle tax. Rickshaw and carts are neglible contributing
nothing to the annual vehicle tax.

Key Issues
 There is no clear policy for Transport Management Office to make compulsory payment of
Municipal Vehicle Tax before receiving central government tax clearance.
 Dual Tax collection mechanism

Recommendations for Improvement

 Hold discussion with Transport Management Office for the compulsory provision of municipal
vehicle tax clearance before the central government tax clearance. Request Department of
Transport Management through Ministry of Federal Affairs and Local Development to make
legal provision for mandatory clearance of municipal vehicle tax before providing tax
clearance of central government.
 Revenue sharing mechanism with Transport Management Office.

5.7 Local Market Tax (Semi Annually)

There are 2 semi annual markets operating in Baglung. The following table provides information
about weekly markets and their tax collection status:

Table 2 Local Markets and Revenue

(In NRs '000)

Market Place Market Day Collection (2013/14) Contract Amount (2014/15)
Pension Camp Road Once a year 20 20 (19,300+1150)
Bangechaur (Baglung Kalika Once a year 20 20
Temple)
Key Issues
 Marekt tax collection is very less

Recommendations for Improvement

 Organize markets, trade fairs jointly with the LCCI.

There are no Hatiya or recurring markets happening in the municipality at the moment, however
the municipality has approved rates for 2015-16 covering quite a range of product types for local
markets.

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5.8 Other Taxes
In addition to taxes mentioned above, Baglung Municipality collects Entertainment Tax and
Advertisement Tax. Although, there is no significant potential to collect revenue from these taxes
due to limited revenue base, these taxes could make some contribution to own source revenue,
if collection methods and efficiency are improved.

Baglung collected 33,253/- in fiscal year 2014/15.The municipality is collecting Entertainment Tax
from locally organized fairs at the rate of NRs. 500 per day. For movie theatres and cultural shows
the municipality has approved 3% on the entrance fee for the fiscal year 2015-16. Additionally the
municipality levies NRs. 500/- per show as commercial video tax. There are two film hall within
Baglung Municipality however one is not in operation.

Baglung Municipality had collected NRs. 95,000 under the Advertisement Tax through contracting
private party in the FY 2014/15. The municipality levies rates based on ownership of the property
(private or public) and size of the board (sq feet). Besides boards the municipality has approved
rates for weekly commercial banners, Vehicle mikings and rickshaw miking.

Key Issues
 Temporary sheds and footpath businesses have not been covered under the Tenant Tax
 Entertainment Tax to cable television networks is not imposed.

Recommendations for Improvement

 Collect information of businesses operating on footpath and public land and bring into Tenant
tax net by fixing the tax rates and awarding revenue collection contract to private sectors.
 Issue letter to cable television networks for the payment of Entertainment Tax on the basis of
number of customers' served.

5.9 Property Rental

The municipality has handful of properties that generate income. Altogether there are 3 properties
out of which one picnic spot at Baglung Kalika is being constructed which will be jointly operated
with Kalika Guthi in PPP model. A canteen was rented out in last financial year however the same
has been closed in current year. The canteen is located within the municipality premises. The
municipality is renting out one meeting hall at udhan on daily basis, on an average the revenue
from the hall amounts to 10,000/- per year.

Key Issues
 The municipality is lacking efficient utilization of its property like private sector.
 The municipality has very few properties.

Recommendations for Improvement

 Finalize the ongoing park as soon as possible.
 Initialize investment plans to acquire or build more properties.

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5.10 Recommendation Fees
Recommendation fees are an important source of revenue, accounting for 12% of total own-
source revenues. Revenues from this heading include fees for recommendations for organization
registration and renewal, citizenship, passport, address certification, transfer of ownership of land
and house, certification of land-plot boundary and others. The current rate for Recommendation
Fee ranges from NRs. 50 to NRs. 1600 per recommendation or certification. There is a need to
review the rate on the basis of the time required to complete the recommendation procedures and
the importance of recommendation.

5.11 Parking Fees

The municipality collected a negligible amount of parking fees amounting to NRs. 4,000/-only in
the fiscal 2010-11 and has stopped collecting it since then. Municipality has been keepimg mum
on the parking fees being collected at

Key Issues
 Municipality has not allocated appropriate space for pay parking.
 Other organization collecting parking fees (Community forest at Baglung Kalika)

Recommendations for Improvement

 Identify appropriate locations for pay parking and call a notice to private sectors for
management contract.
 Coordinate with traffic police and transport entrepreneurs' organizations to stop vehicle
parking in unauthorized places.
 Take ownership of Baglung Kalika Parking Fee Collection

5.12 Other Fees and Charges

The municipality levies sanitation fee of NRs. 30 per month based on location. The municipality
has started collecting fee for street light from fiscal year 2014/15. Besides that, the municipality
collects public infrastructure maintenance fee for road in cases where households and
communities install drinking water pipelines which results in damages to existing roads. For solid
waste, there are no sewage lines in Baglung and households have septic tanks (eventually dealt
by private vendors).
The municipality recently contrcusted a public toilet which has been handed over to Lions Club
(just few months ago), the income sharing ratios has not been finalized yet and further the
municipality will also bear the initial operational cost of the public toilet.

The municipality has arranged a cattle case for the domestic animals which are abandoned in
public places then captured to the cage. Municipality levy charges when cattle owners come to
claim their animals.

Recommendations for Improvement

 Initiate processes to involve private partners for the entry fee collection from the visitors (Picnic
groups) in picnic spots.
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 Introduce Tourism Fee at areas such as Kalika Temple, Panchakot Panchadham, etc.
 Develop baglung as a major transit point for Muktinath and Dhorpatan, discover new trekking
routes and trails.

6 Revenue Administration of the Municipality

Municipal revenue administration is carried out by the Tax Sub-section under the Financial
Administration Section. There are two permanent officers (non gazeted officer first class and non
gazeted officer second class) and one temporary office assistant assignedassigned to the Sub-
section for municipal revenue administration.
The Tax Sub-section has a medium sized room where all records are kept and counters are
placed. The section has 5 computers and 5 printers. The system has frequently been disturbed
due to problems arising in internet server and software. One computer is assigned for integrated
property tax system and the other one handles all the other cash receipts for various services.
For the Integrated Property Tax administration, a software program developed by a private
company is being used for the property record keeping and tax collection works. So, there is high
dependency on software service provider. There is manual billing system which is also in
operation. For obtaining at actual figure we have to add the revenue from software as well as
revenue from manual billing. Due to separate record keeping system of the taxes, an integrated
tax dues record of individuals can't be generated. In addition, there is a separate software program
developed by the same private vendor to provide cash receipt of other taxes and fees and revenue
accounting. However, besides the office assistant both the officers are well versed in the software
that they have been using.
In order to inform the citizens, municipality has been organizing tax orientation program to
business community once a year. Likewise, the municipality disseminates messages time to time
about the tax rates and discount offers through local radios and newspapers.

Effort on Revenue Enhancement

In the last fiscal year 2014/15, Municipality has received Rs. 2,075 thousands from UGDP for
enhancement of Revenue of the municipality. Due to release of budget at the edge of fiscal year
municipality has only utilized few part of the budget available. Baglung Municipality has made
survey of households within the municipal jurisdiction in order to prepare the details for IPT. Total
expenses for survey was Rs. 998,990 out of which Rs. 475,000/- was utilized from UGDP budget.

Key Issues
 Lack of an integrated, computer based revenue administration system.
 Billing system or prior information system about the tax dues is necessary.
 Althought the staffs here are relatively skilled in using the software, absence of one personnel
can shift the whole burden to the other who is present.

Recommendations for Improvement

 Atlest 1 additional staff has to be assigned for giving uninterrupted service to the cititzens
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 Improve revenue administration system by strengthening the database.
 Conduct tax awareness campaigns annually.
 Establish a tax billing system to inform the tax-payers about their dues of taxes at the
beginning of fiscal year.
 Organize trainings and observation visits for all staff working in the sub-section.
 Establish a single window system and provision for mandatory clearance of taxes and fees
dues before the issue of recommendation certificates and other services from the municipality.
 Organize Revenue Advisory Committee meeting twice a year for the effective coordination
with Inland Revenue office and Chamber of Commerce and Industry (CCI).
 Establish provision for rebate and penalty system in all tax and fees.
 Prepare municipal budget on the basis of revenue projection study.

7 Municipal Revenue - Historic Trends

Total revenue of Baglung municipality was NRs. 163.6 million in fiscal year 2014-15. Share of
own source revenue is about 8% and rest 92% of the total revenue has been received from the
external sources. There are some improvement observed in the own source revenue ratio in
recent years. Municipal revenue statement of past six years is presented in Annex.

Table 3 Municipal Revenue Situation

(In NRs ‘000)

S.N Revenue Sources 2010/11 % 2012/13 % 2014/15 %

I Own Source Revenue 6433 10% 9846 14% 12496 8%

1 Local Taxes 3053 5% 5094 7% 7139 4%
2 Service Fee, Charges & Others 3380 5% 4753 7% 5357 3%
II External Revenue 58292 90% 60966 86% 151073 92%
III Total Revenue 64725 100% 70813 100% 163569 100%
Note External Revenue includes balance forward and various funds.

Annual growth rate of local taxes is 23% whereas annual growth rates of service fee, charges and
others is 14%. Major own source revenues and their annual growth rate are given the table below:

Table 4 Growth Rate of Main Sources of Municipal Own Source Revenue

(In NRs '000)

Baglung Municipality
Financial Information - Municipal Revenue

Actual Budget Growth

S.N Account Head
2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 Rate

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 I Own Source Revenue
A Local Tax
1 Integrated Property Tax 0 0 0 3443 4534 4057 32%
2 Business Tax 1123 1713 1547 1660 1657 1800 8%
3 Rent Tax 30 51 52 341 389 349 102%
5 Other tax 1899 2960 3495 1310 560 435 -28%
Vehicle Tax /(Annual) 3 101 180 109 222 150 138%
Entertainment Tax 23 76 58 55 32 55 4%
Advertisement Tax 6 4 75 85 95 125 138%
Land and House and Land Tax Arrears 1867 2779 3183 1061 211 105 -41%
Total Local Tax 3053 4724 5094 6754 7139 6641 23%

B Service Fee, Charges & Others

6 Building Permit Fee 1583 1839 2146 2543 1941 3000 8%
7 Recommendation Fee 764 948 1018 1421 1460 1605 19%
8 Property Rental 0 0 0 0 0 100
9 Parking Fees 4 0 0 0 0 0
10 Penalty 0 0 0 12 1 5
11 Sanitation Fees 499 681 746 876 912 961 16%
12 Relation Certification Fee 29 85 32 52 66 50 12%
13 Property Valuation Fees 212 263 397 780 708 801 42%
14 Public Infrastructure Maintenance Fees 108 165 209 169 85 156 -5%
15 Other Miscellaneous Revenues 179 267 206 560 184 575 8%
Total Service Fee, Charges & Others 3380 4248 4753 6412 5357 7251 14%

Total Own Source Revenue 6433 8972 9846 13166 12496 13892 19%

Municipal revenue for the FY 2014/15 from different heads of Own Source Revenue are presented below:

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 Own Source Revenue
FY 2014/15
2% 0%
1%
7%
6%

Recommendation IPT 36%

12%

Building Permit
Fees 16%

Business
13%

Other Tax 4% Rent Tax

3%

Figure 1 Share of Major Heads of Own Source Revenue in FY 2014/15

Based on the historic data of municipal revenues, Own-Source Revenue growth is 19%. However,
as discussed above, there is considerable scope to improve revenue coverage and the revenue
administration system.

8 Municipal Revenue Projection for Next 5 Years in 'Business As Usual'

Scenario
The revenue projection of Baglung municipality in ' Business As Usual' situation is done based on
the historic revenue growth trend in last five years. If the other variables remain unchanged,
keeping the historic trend as its basis, own source revenue of Baglung municipality is estimated
NRs. 22.47 million in the year 2019/20.

Table 5 Municipal Revenue Projection for Next 5 years in 'As Usual Business'

(In NRs '000)

Budgeted Projections
Account Head
2015/16 2016/17 2017/18 2018/19 2019/20

Own Source Revenue

Local Tax
Integrated Property Tax 4,057 4,665 5,365 6,169 7,095
Business Tax 1,800 1,987 2,194 2,423 2,675
Rent Tax 349 391 438 491 550

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 Other taxes 285 328 377 433 498
Vehicle Tax /(Annual) 150 173 198 228 262
Entertainment Tax 55 63 73 84 96
Advertisement Tax 125 144 165 190 219
Land and House and Land Tax Arrears 105
Total Local Tax 6,491 7,371 8,374 9,516 10,818

Service Fee, Charges & Others

Building Permit Fee 3,000 3,261 3,544 3,852 4,187
Recommendation Fee 1,605 1,827 2,080 2,368 2,696
Sanitation Fees 961 1,165 1,412 1,713 2,077
Property Valuation Fees 801 1,033 1,332 1,718 2,216
Public Infrastructure Maintenance Fees 156 171 188 207 228
Relation Certification Fee 50 60 72 86 104
Other fees & charges 680 110 121 133 146
Total Service Fee, Charges & Others 7251 7626 8749 10077 11652

Total Own Source Revenue 13,742 14,997 17,123 19,593 22,471

9 Main Findings

Baglung’s internal revenue and grant from the central government are increasing and there are
also significant contributions from the people.

9.1 Taxes
 The high materiality of Integrated Property Tax and Business Tax in own-source
Revenues contributing to 36% in the last fiscal year (2014/15).
 A systemic lack of billing and routine procedures for collection for business tax, rent tax,
vehicle tax and other taxes
 Unavailability of payment options, (advance payments, bank deposits)
 A lack of clear rules on handling arrears, including process guidelines for issuing notices
etc.
 Inability of the administrative system for tax compliance - for example rent tax has no
compliance mechanism.

9.2 Fees and other charges

 Building Permit and Recommendation Fees contribute most to the fees.
 Other fees such as parking fees should be administered with objectives of traffic
management and would be expected to cover collection and enforcement costs but not
contribute significant surplus, such as Baglung Kalika Parking Area, other area in the
core commercial lanes of the city.
 Recommendation fees and other charges for citizen certifications on title, transfers,
births are expected to cover costs. However, they should not be considered as major
sources of revenues.

18
The Revenue Enhancement Plan presented below has identified activities that could enhance
municipal own source revenue mobilization capacity. Based on the recommendations following
from the situation analysis, a list of activities for the improvement has been identified under the
Revenue Enhancement Plan.

10 Revenue Enhancement Plan of Baglung Municipality

The Revenue Enhancement Plan of Baglung's for a period of five years from FY 15 to FY 19. The
municipality will review this plan annually before the Municipal Council meeting of FY 2015 and
update yearly.

Table 6: Revenue Enhancement Plan

Actions for Improvement Timeline Responsibility Extra Investment or

External Support
A. Revenue Administration Reform
 Prepare multi-locational Within FY Financial Administration Support needed from
computerized database for one 2015/16 , Feb Section, development partner
door collection system of all taxes Revenue Section or central
and fees. government
agencies.
 Prepare computerized database for Completely Financial Administration Support needed from
integrated revenue collection within FY Section, development partner
system by including major taxes: 2015/16, Tax sub-section or central
 Integrated Property Tax March government
 Business Tax agencies
 House Rent Tax
 Computerize revenue collection and Completely Executive officer, Support needed from
revenue accounting system and within FY Account Section and development partner
provide trainings to the staff 2015/16, Tax Sub-section or central
May/June government
agencies
 Development of forms for Within Executive Officer, LCCI
information collection to update 2015/16 Financial Admin.
business tax data base, collect Section, Revenue
information in collaboration with Section
LCCI. Local institutions
Ward offices
 Carry out study of security, use and From FY Executive Officer, Support needed from
maintenance needs of the 2016/17 Financial Administration development partner
Integrated revenue software and Section, Revenue or central
gradually transform the system so it section government
adds up to the convenience and agencies
standard maintenance of the
software. Introduce web based and
sms based software
19
Actions for Improvement Timeline Responsibility Extra Investment or
External Support
 Formulate and implement a Within Financial Administration Support needed from
separate work plan to administer 2015/16 Section, Revenue development partner
rent tax database Section or central
government
agencies
 Allocate yearly budget to conduct From FY Financial Administration
revenue awareness campaign. 2015/16 Section, Revenue
Prepare publicity materials for tax Section
awareness campaign.
 Continuation of Rewards policies From Revenue section
for tax payers 2015/16 Financial Administration
Section
 Strictly comply with rebate for early From FY Revenue section,
payments and penalty for late 2015/16 Revenue Advisory
payments of tax and fees. Committee, Municipal
council
 Prepare income budget based on From FY Financial administration
revenue projection study 2015/16 section, municipal
council, accounts
section
 Define and activate committees that From FY Executive Officer, Support needed from
support policy development on 2016/17 Administration Section development partner
municipal revenue. Organize Revenue Section or central
meeting of Revenue Advisory Municipal Council government
Committee once every six months: agencies. Get the
 Revenue Advisory Committee Ministry involved
with LCCI, Inland Revenue esp, for revenue
Office, Office of Small and sharing committee.
Cottage Industries.
 Revenue Sharing Committee
with DDC and Land Revenue
Office and Small and Cottage
Industries (construction
companies)
 Public Property Identification
Committee with different district
offices, Town Development
Committee, DDC, Various
Local committees and groups

 Monitor and update the Revenue From FY Financial Admin.

Enhancement Plan once a year and 2015/16 section, Revenue
as when required. section

20
Actions for Improvement Timeline Responsibility Extra Investment or
External Support
 Evaluate the existing work load of Within Executive Officer
the Revenue Section and institute 2016/17 Revenue section
relevant organizational structure Admin Section
and man power. Initiate Accounts Section
performance evaluation system of Municipal Council
employees and introduce packages
based on the performance
 Assess the current infrastructure Within Executive Officer External Financial
state of the revenue section and 2016/17 Revenue section Support
provide sufficient space and Admin Section
facilities for the human resource Accounts Section
and tax payers:
 Multiple tax counters (setup a
counter at the core city area)
for easy access
 Creation of sub sections for
handling major taxes and fees
 Tax help desk
 Friendly environment for the tax
payers, drinking water, sitting
arrangements
 Strengthen the ward offices From Revenue section External Financial
delegate taxes and fees collection 2016/17 Admin Section Support
authority. Accounts Section
Municipal Council
Ward Offices
B. Integrated Property Tax
 Revise property valuation rate for Effective from Revenue section,
the Integrated Property Tax FY 2015/16 Revenue Advisory
Committee, Municipal
council
 Transfer the existing municipal From FY Revenue Section External support
property records into the improved 2015/16 needed
software. May/June
 Update database of IPT by From FY Administration Section, External support
updating land plot information 2015/16 Revenue section needed
collected from Land Revenue Office May/June
and buildings information collected
through field survey
 Issue notice to the largest tax From FY Revenue Sub Section
payers for payment 2015/16
June
 Establish system advance tax From FY Revenue Section
collection for certain number of 2015/16
years

21
Actions for Improvement Timeline Responsibility Extra Investment or
External Support
 Initiate the process of bringing From FY Revenue Section External support
properties of various associations 2015/16 needed
into Integrated Property Tax
C. Business Tax
 Revise Business Tax rate annually From FY Revenue advisory Coordination with
based on the investment, turnover 2015/16 committee, Municipal LCCI
and location of the business. Council & Revenue
Section
 Enter the Business Tax information From FY Revenue section External Support
into computer software collected 2015/16 April needed
from field survey
 Update Business Tax database by From Revenue section,
taking out businesses which are 2015/16 Financial Administration
closed or owner died or modified Section, Municipal
business types Council, LCCI
 Identify large business tax payers From FY Revenue section Coordination with
and categorize them 2015/16 LCCI LCCI
 Establish system advance tax From FY Revenue Section
collection for certain number of 2015/16
years
D. House Rent Tax
 Prepare records of houses rented From FY Executive officer, Tax External Support
to corporate sector in coordination 2015/16 Sub-section
with Inland Revenue Office. March

 Prepare database of rental houses From FY Tax Sub-section External Support

and owner collected through field 2015/16 April
survey.
 Determine minimum rental price Effective from Tax Sub-section,
rate on the basis of location and FY 2015/16 Financial Administration
structure of houses Section, Revenue
Advisory Committee,
Municipal Council
 Based on the minimum rental rate, From FY Revenue Section
collect house rent tax together with 2015/16
Integrated Property Tax.
 Initiate the process of bringing From FY Revenue Section
properties of various associations 2015/16
into rent tax coverage
 Revise the collection mechanism From FY Revenue Section External Support
and base it on revenue sharing 2016/17
modality with Inland Revenue Office
E. Vehicle Tax

22
Actions for Improvement Timeline Responsibility Extra Investment or
External Support
 Coordinate with all municipalities of From FY Executive officer,
Dhawalagiri zone for the effective 2015/16 Administration Section,
operation of vehicle tax collection Financial Administration
counter and to formulate policy of Section, Revenue
revenue sharing. section
 Hold discussion with Transport From FY Executive officer,
Management Office for the 2016/17 Administration Section,
compulsory provision of municipal Financial Administration
vehicle tax clearance before the Section, Revenue
government tax clearance and section
request through Ministry of Federal
Affairs and Local Development to
make legal provision to Department
of Transport Management
 Organize inter-municipality From FY Executive officer,
coordination meeting regularly. 2015/16 Administration Section,
Financial Admin.Section
F. Local Market Tax
 Assess tax base and rate along From FY Revenue Advisory
with the past revenue collection 2015/16 Committee, Financial
history to determine the minimum Administration Section,
contract amount Revenue section
 Organize additional market fares From FY Executive officer, Coordination with
and trade shows jointly with LCCI 2015/16 Administration Section, LCCI
Financial Admin.
Section
G. Other Taxes
 Collect information of footpath and From FY Administration Section,
public land businesses, determine 2015/16 City Police, Revenue
the Tenant tax rates and collect tax section
through annual revenue collection
contract
 Issue letter to cable television From FY Tax Sub-section, City
networks for the payment of 2015/16 Police
entertainment tax on the basis of
their customers' number.
H. Building Permit Fee
 Increase the rate of building permit From FY Revenue Section,
fee annually. 2016/17 Planning and Technical
Section, Municipal
Council
 Revisit the discount provisions on Within FY Tax Sub-section,
building permit fee to bring the old 2015/16 Planning and Technical
houses into building permit net. Section, Municipal
Council
23
Actions for Improvement Timeline Responsibility Extra Investment or
External Support
I. Parking Fee
 Identify appropriate locations for Within FY Planning and Technical
pay parking other than the highway 2015/16 Section, Financial
roadsides and call notice to private Administration Section,
sectors management contract Revenue section
 Coordinate with traffic police and Within FY Planning and Technical
transport entrepreneurs' 2015/16 Section, City Police,
organizations for the restriction of Executive Officer
vehicle parking in unauthorized
places and to arrange the parking
in identified places.
J. Public Private Partnership
 Prepare PPP policy to contract out Within FY PPP Focal Person,
management of following facilities 2016/17 Municipal Council
to the private sector
 Picnic Spots
 Town Hall
 Introduce parking fees in the Bus Within FY Revenue section,
park and Jeep park and mobilize 2016/17 Financial Administration
private sector for collection of fee Section, Planning and
Technical Section
 Operate urban service centres such Within FY Municipal Council,
as public toilets in PPP Modality 2016/17 Financial Administration
Section, Executive
Officer
 Introduce solid waste management From FY Revenue section,
services based on public 2016/17 Financial Administration
partnership concept Section, Planning and
Technical Section
 Develop and initiate tourist entry From FY Revenue section,
fee in natural and cultural heritages 2016/17 Financial Administration
of the city through PPP Modality Section, Planning and
Technical Section
K. Other Fees and Charges
 Revise rate of fees and Regularly Revenue Section,
recommendation charges annually Revenue Advisory
 Soil testing facility by the Committee, Municipal
municipality. Council

11 Revenue Projections of the Municipality

24
It is expected that own source revenue mobilization will be improved after the implementation of
above mentioned REP. Therefore, projection after implementing the REP has been estimated on
the basis of the following assumptions:

Table 7: Assumptions for Revenue Projection based on Revenue Enhancement Plan

Revenue Heading Assumptions for Revenue Projection

Integrated  Due to revision in property valuation rate, revenues are estimated to
Property Tax increase by 30% in Year 1.
 There will be 10% annual increase in total collection from Year 2 due to
updated property database and tax billing system.
Business Tax  Out of the currently registered 2,337 businesses, the number is estimated
to increase annually by 10% in Year 1 and 5% from Year 2.
 The total collection is estimated to increase by 20% in Year 1 and 15%
in the following four years due to increased collection efficiency due to
introduction of billing system, increase in tax rate and provisions of
penalty for late payments.
Housing Rent Tax  Estimated number of houses on rent is 7848
 Projection is based on the 5% annual increase in rental price
 Out of the total estimated number, tax coverage is estimated 25% in year
1, 35% in year 2 and 20% after year 2 as a result of introduction of billing.
Vehicle Tax  Out of total registered vehicles in Baglung, estimated of tax coverage
50% in year 1,70% in year 2 and 80% afterwards
 Number of vehicles estimated to increased by 10% annually
Entertainment Tax  10% annual increase in the past years' actual collection is estimated due
to brining cable television networks into the tax net.
Advertisement Tax  Due to the increase in market prices, 5% annual increase is estimated
from Advertisement Tax.
Building Permit  15% annual increase is estimated in Building Permit Fee due to revision
Fee in fee rate, new constructions and provision of rebate to bring in building
permit coverage to old houses.
Recommendation  10% annual increase is estimated in the collection of recommendation
Fee fee due to rates' revision.
Property Rental  10% annual increase over the last years' actual income is estimated due
to revision in rent rate.
Vehicle Parking  It is estimated that 15% increase in first year and 10% increase in later
Fee years due to added pay parking areas and coordinating roles with
stakeholders
Relations  Estimation is 10% annual increase over the previous year actual income
Certification and due to rate revision and increased transaction due to population growth.
Ownership
Transfer Charges
Property Valuation  25% increase is expected in year 1 and % annual growth is expected
Fees from year 2 onwards.

25
 Revenue Heading Assumptions for Revenue Projection
Public  30% increase is expected in year 1 and year 2,
Infrastructure  10% annual growth is expected from year 3 onwards.
Maintenance Fees
Other Fees and  25% expansionis expected in year 1 and 10% annual increase due to
Charges rate revision and increased transaction and population growth from year
2 and onwards.

For external revenue projection, the followings assumptions are set to estimate revenue for next
five years. These revenue projections are independent of implementation of REP.

(i) 10% increase in every two years for Government Grant, Local Development Fee,
Agricultural Road, Health Program, Reserve Fund, Road Board Program, Local
Governance & Community Development Program (Recurrent), Revenue Sharing
and Peoples Contributions.
(ii) 10% annual increase for Social Security Grants

Based on the above assumptions, revenue projection of Baglung municipality for the next five
years is given below:

Table 8: Municipal Revenue Projection with Revenue Enhancement Plan

(In NRs '000)

Actual Projection NPR '000'
S.N Account Head
2014/15 2015/16 2016/17 2017/18 2018/19 2019/20
I Own Source Revenue
A Local Tax
1 Integrated Property Tax 4534 5894 6483 7131 7844 8629
2 Business Tax 1657 2187 2640 3188 3850 4649
3 Rent Tax 389 1730 2180 2404 2650 3652
4 Vehicle Tax /(Annual) 222 667 839 923 1015 1117
5 Entertainment Tax 32 35 39 43 47 52
6 Advertisement Tax 95 100 105 110 115 121
Land and House and Land Tax
7 211 274 302 332 365 401
Arrears
Total Local Tax 7139 10888 12588 14131 15887 18621
B Service Fee, Charges & Others
8 Building Permit Fee 1941 2233 2567 2953 3395 3905
9 Recommendation Fee 1460 1606 1767 1943 2138 2351
10 Penalty 1 5 10 15 20 25
11 Sanitation Fees 912 1095 1204 1325 1457 1603
12 Relation Certification Fee 66 73 80 88 97 107
13 Property Valuation Fees 708 886 974 1072 1179 1297

26
 Public Infrastructure Maintenance
14 85 1720 2236 2459 2705 2976
Fees
15 Other Miscellaneous Revenues 184 230 264 304 349 401
Total Service Fee, Charges &
5357 7846 9102 10158 11340 12665
Others
Total Own Source Revenue 12496 18734 21691 24289 27228 31286

II External Revenue

C GoN Grant (Unconditional)-Recurrent

16 GoN-Recurrent Grant 0 0 0 0 0 0
17 Local Dev Fee-Recurrent 4680 5148 5148 5663 5663 5663
Total GoN Grant (Unconditional)-
4680 5148 5148 5663 5663 5663
Recurrent

D GoN Grant (Unconditional) -Capital

18 GoN-Capital Grant 10455 11500 11500 12650 12650 12650
19 Local Dev Fee-Capital 4870 5357 5357 5893 5893 5893
Total GoN Grant (Unconditional) -
15325 16857 16857 18543 18543 18543
Capital

E Other Program/Capital Grant

20 Agriculture Road 0 0 0 0 0 0
20 GoN Reserve Fund 12026 13229 13229 14551 14551 14551
21 Road Board Program 3000 3300 3300 3630 3630 3630
22 LGCDP-Capital 200 220 220 242 242 242
24 UGDP - IDA 10041 7430 0 0 0 0
23 LGCDP-Recurrent/Social Mobilization 4519 4971 4971 5468 5468 5468
24 DDC- Program Grant 8255 9080 9988 10987 12086 13294
25 GIZ 1024 0 0 0 0 0
26 Grants from Ministries 0 0 0 0 0 0
27 UGDP COMP II 35363 31733 0 0 0 0
Solid Waste Management and
27 Resource Mobilization Centre 3900 4290 4290 4719 4719 4719
28 Other Program Grant 869 956 956 1051 1051 1051
29 UDGP Grant - Component II 0 0 0 0 0 0
30 UGDP Transfer - REP 2075 900 0 0 0 0
Total Other Program Grant 81272 76108 36954 40649 41748 42956

F Loan & Borrowing

29 TDF Loan 18428 31079 0 0 0 0
TDF Loan Total 18428 31079 0 0 0 0

G Other Revenue
30 Advance Refund 865 952 952 1047 1047 1047
Revenue Sharing - DDC and
31 6752 7427 7427 8170 8170 8170
Registration Fee
32 People Contribution 6811 7492 7492 8242 8242 8242
27
 33 Other Funds 17808 19589 19589 21548 21548 21548
Total Other Revenue 32237 35461 35461 39007 39007 39007

Total External Revenue 151942 164653 94420 103861 104960 106169

Total Revenue of the Year 164438 183387 116110 128151 132188 137455

12 Costs and Benefits of the Revenue Enhancement Plan

It is expected that the municipal resource mobilization capacity will be enhanced after
implementing the REP. It is estimated that the municipal own source revenue will reach NRs.
31.29 million in fiscal year 2019/20 following implementation of the plan, which is more than
double of the own source revenue of fiscal year 204/15 (NRs. 12.5 million). It is noted that revenue
estimated in the Business As Usual scenario in FY 2019/20 is NRs. 23.57 million.
The municipality will require technical and financial support from development partners and
central government agencies to implement the Revenue Enhancement Plan. The following table
shows the estimated additional costs for the next five years to implement the REP and the surplus
revenue after the implementation of the REP.

Table 9: Net Benefits of Revenue Enhancement Plan, FY 2015-20

(In NRs '000)

S.N Revenue Sources 2015/16 2016/17 2017/18 2018/19 2019/20
A Revenue from Own Sources as per REP 18,734 21,691 24,289 27,228 31,286
Revenue from Own Sources as per Business
B as Usual 13,892 15,806 18,021 20,588 23,573
C Surplus from implementing REP 4,842 5,884 6,269 6,640 7,713
D Estimated cost of Implementing REP 2,850 1,000
E Net Surplus from implementing REP 1,992 4,884 6,269 6,640 7,713
F Cumulative Surplus 1,992 6,876 13,145 19,785 27,498
The above table shows that the REP will contribute to mobilize net revenues of NRs. 27.5 million
within next five years, which can be mobilized to finance investment and operation and
maintenance activities in the municipality. Graphical presentation of net benefit from REP is
presented in below graph:

28
 35,000

30,000

25,000
A Revenue from Own Sources
20,000 as per REP
B Revenue from Own Sources
15,000 as per Business as Usual
C Surplus from implementing
10,000 REP

5,000

-
1 2 3 4 5

Figure 2 Net benefit from implementing REP

Note: Blue line indicates revenue from REP, Red line indicated revenue from Business as usual and green line indicates
net benefit from implementing REP.

Due to the implementation of Revenue Enhancement Plan, major own source revenue sources
that are expected to contribute to higher revenues are:
a. Integrated Property Tax
b. Business Tax
c. Rent tax

The contribution of these major three revenue sources as compared with the business as usual
scenario is tabulated below.

Table 10: Net Benefits of REP in Major Three Revenue Sources, FY 2016/17-2019/20

(In NRs '000)

S.N. Sources 2015/16 2016/17 2017/18 2018/19 2019/20 Total
1 Integrated Property Tax 5,894 6,483 7,131 7,844 8,629 35,981
2 Business Tax 2,187 2,640 3,188 3,850 4,649 16,514
3 Rent Tax 1730 2810 2404 2650 3652 12618

29
 Annex 1. Situation of Municipal Revenue of Past fuve Years
(NRs ‘000’)
Actual Budget
S.N Account Head
2010/11 2011/12 2012/13 2013/14 2014/15 2015/16

I Own Source Revenue

A Local Tax
1 Integrated Property Tax 0 0 0 3443 4534 4057
2 Business Tax 1123 1713 1547 1660 1657 1800
3 Rent Tax 30 51 52 341 389 349
5 Other tax 1899 2960 3495 1310 560 435
Vehicle Tax /(Annual) 3 101 180 109 222 150
Entertainment Tax 23 76 58 55 32 55
Advertisement Tax 6 4 75 85 95 125
Land and House and Land Tax Arrears 1867 2779 3183 1061 211 105
Total Local Tax 3053 4724 5094 6754 7139 6641

B Service Fee, Charges & Others

6 Building Permit Fee 1583 1839 2146 2543 1941 3000
7 Recommendation Fee 764 948 1018 1421 1460 1605
8 Property Rental 0 0 0 0 0 100
9 Parking Fees 4 0 0 0 0 0
10 Penalty 0 0 0 12 1 5
11 Sanitation Fees 499 681 746 876 912 961
12 Relation Certification Fee 29 85 32 52 66 50
13 Property Valuation Fees 212 263 397 780 708 801
14 Public Infrastructure Maintenance Fees 108 165 209 169 85 156
15 Other Miscellaneous Revenues 179 267 206 560 184 575
Total Service Fee, Charges & Others 3380 4248 4753 6412 5357 7251

Total Own Source Revenue 6433 8972 9846 13166 12496 13892

II External Revenue

C GoN Grant (Unconditional)-Recurrent

34 GoN-Recurrent Grant 1450 1433 1433 0 0 0
35 Local Dev Fee-Recurrent 2473 2473 2473 4913 4680 4680
Total GoN Grant (Unconditional)-
3923 3906 3906 4913 4680 4680
Recurrent

D GoN Grant (Unconditional) -Capital

36 GoN-Capital Grant 6930 11475 8997 11460 10455 10471
37 Local Dev Fee-Capital 5769 5714 3141 6437 4870 4870
Total GoN Grant (Unconditional) -Capital 12699 17189 12138 17897 15325 15341

30
 E Other Program/Capital Grant
38 Agriculture Road 1480 1500 1150 1445 0 0
39 GoN Reserve Fund 11693 13289 13182 19555 12026 30000
40 Road Board Program 1266 1331 2030 2050 3000 3000
41 LGCDP-Capital 7755 0 0 0 200 0
42 UGDP - IDA 0 7197 7735 9447 10041 7430
43 LGCDP-Recurrent/Social Mobilization 1114 1418 1280 1303 4519 0
44 DDC- Program Grant 8255 8046 9347 3713 8255 0
45 GIZ 25 0 674 0 1024 0
46 Grants from Ministries 0 400 74 96 0 0
47 UGDP COMP II 0 0 0 6157 35363 31733
Solid Waste Management and Resource
48 Mobilization Centre 111 0 0 0 3900 0
49 UGDP REP 0 0 888 913 2075 900
Total Other Program Grant 31698 33180 36360 44679 80403 73063

F Loan & Borrowing

59 TDF Loan 0 0 0 0 18428 6394
TDF Loan Total 0 0 0 0 18428 6394

G Other Revenue
60 Advance Refund 1 13 18 143 865 0
61 Revenue Sharing - DDC 0 3822 3293 6409 6752 6800
62 People Contribution 3274 2174 931 8172 6811 1250
63 Other Funds 6697 4535 4320 5495 17808 4173
Total Other Revenue 9972 10545 8562 20219 32237 12223

Total External Revenue 58292 64820 60966 87708 151073 111701

Total Revenue of the Year 64725 73792 70813 100874 163569 125592
Data Source: Records provided by the Municipality and Budget Book of Baglung Municipality

31
 List of Participants

Consultation on Revenue Enhancement Plan

Mr. Jagannath Lamichhane, Executive Officer, Baglung Municipality

Mr. Basant Kr. Shrestha, President, Baglung Chamber of Commerce and Industries
Mr. Dhurba Raj Rajbhandari, First Deputy President, Baglung Chamber of Commerce and
Industries
Mr. Trilochan Giri, Engineer, Baglung Municipality
Mr. Yukta Subedi, Planning and Administrative Officer, Baglung Municipality
Mr. Yogendra Raj Parajuli, Finance Officer, Baglung Municipality
Mr. Bhimsen Pant, Chief, Community Development, Baglung Municipality
Mr. Hari Narayan Upadhaya,Revenue Section , Baglung Municipality
Ms. Ganga Devi Sharma, Revenue Chief, Baglung Municipality

32