A DISSERTATION SUBMITTED TO THE NILERD, NEW DELHI, INDIA IN THE PARTIAL FULFILLMENT FOR THE POST GRADUATE DIPLOMA IN HUMAN RESOURCE PLANNING AND DEVELOPMENT (MARCH 3, 2015 – AUGUST 18, 2015)

1. TOPIC
A REVIEW OF THE INTERNAL REVENUE RESOURCES OF
HETAUDA SUB-METROPOLITAN CITY
Presented By
Mahendra Chapagai
Roll No.-17
Nepal
DISSERTATION PRESENTATION

2. OUTLINE OF THE DISSERTATION

3. INTRODUCTION
• Decentralization is the vehicles to reduce poverty and
inequality in both rural and urban sector
• Municipal governance is a part of local governance
• Deals with needs of every citizen to solve day to day
problems
• As closer as possible to people to solve local problems
• Two-tier local governance modality
• LSGA provides powers, roles, duties and responsibilities
• Functions (finance, water & sanitation, education & sports,
Transport & work, physical development, health etc.)
• Revenue collection is one of the main functions of local
governments.
• Internal income and external income

4. STATEMENT OF THE PROBLEM
• People migrate from rural to
urban pressure on service
delivery.
• Municipality function area
broad
• Public demand high
• Challenge of good governance
Internal Revenue for
• Salaries to retirement
benefits
• Admin cost
• Service delivery and fulfill
the development needs
• MCPM indicator (19) local resource mobilization
• Recently upgraded to sub-metropolitan city
Problems
• Absence of elected political leaders,
• lack of revenue action plan,
• lack of human resource planning and development,
• Lack of maintaining revenue records

5. OBJECTIVES OF THE STUDY
To review the utilization of the
internal revenue resources of
municipality.
 To study the trends of the
internal income status of
Hetauda Sub-Metropolitan City.
 To identify the problems and
challenges in internal revenue
resources mobilization.
 To provide suggestions as well as
recommendation in resource
mobilization and its utilization.

6. Primary Data
Secondary Data
METHODOLOGY
presented on tables, charts and graphs with the help of MS-Exel
Experience
 Local body financial administrative regulations,
2007,
 Previously carried out researches, thesis related to the study,
different articles, journals, reports, and books related to the study

7. SIGNIFICANCE OF THE STUDY
• Useful as a reference material for related researches
and studies,
• Beneficial to the municipality revenue forecasting,
• Annual budgeting process,
• Revenue action plan,
• Increase the internal income
• Provide better service and quality

8. • Hetuda Sub-Metropolitan City,
• Income & expenditure year 2009/2010 to 2013/2014
LIMITATIONS OF THE STUDY

11. ORGANIZATION CHART OF THE MUNICIPALITY

12. • Local Self Governance Act, 1999
• Local Self Governance Regulation, 1999
• Local Body Financial and Administrative Regulations, 2007
Legal Background/Framework of Revenue Mobilization
Internal Income/Revenue Resources
1. Local Tax (Land Revenue and Tax, Home and Land Tax, Rental Tax,
Enterprise Tax, Vehicle Tax, Integrated Property Tax, Entertainment Tax,
Advertisement Tax)
2. Service Charge/fee (Vehicle Parking Fee, Valuation of Real Estate, Local
Development Fee, Other Service Charge etc.)
3. Fee (Registration and renew fee, Approval of Building Design Fee, Approval
and Recommendation Fee, Relationship Certified Fee etc.)
4. Sale
5. Resource Mobilization (PPP and others)
6. Interest, Principal, Bonus and Profit
7. Other Income (Fine & Penalty, Rent income….. Etc.)

13. Income status of the municipality
ANALYSIS, INTERPRETATION & PRESENTATION

14. Expenditure status of the municipality

15. Contribution of internal income on total income

16. Contribution of internal revenue resources

17. Five main revenue resources
35.41%13.37%
11.44%
7.96%
5.55%

18. OTHER FINDINGS
• Revenue and technology
• Human resource planning and
development
(1 officer, 2 senior assistant, 4 office
assistant, 17 office helper )
• Database system
• Good governance & Transparency
(Tax payers orientation, monthly press
meeting, regular reporting, citizen charter,
best tax payers award,……..)
• MCPM and internal income

19. Problems in municipal revenue resources mobilization
• Financial delegation is not fully decentralized
• Grant transfer lacks transparency (38.73% decreased in 2012/2013)
• Absence of elected political representatives since 2002
• Lack of evaluation and monitoring from central
• Lack of revenue action plan
• Lack of human resource planning and development
• Weak database system
• Lack of coordination between stakeholders
• Lack of motivation to the employees
• Increased rate of administrative cost
• No networking between revenue and GIS
• Few tax payers orientation program

20. RECOMMENDATIONS
• Placement of elected representatives
• Fully fiscal decentralization
• Establish local government development bank
• Regular facilitation and monitoring by central
government
• Promote performance grant system with clear policy
• Focused on capacity development, infrastructure dev.,
information system and coordination to the
municipality

21. RECOMMENDATIONS
• Revenue action plan
• Reduce the admin cost
• Regular tax payers orientation program
• Data collection and update
• Power delegation to the ward level
• Review and monitoring
• Human resource planning and development
• Link GIS & approval of building design section
with revenue section
• Expenditure should be reliable and
transparent

22. CONCLUSIONS
• Engine of the economy
• Provides administrative, economic , social services as a
means of decentralization
• Municipality can play a vital role in nation building process
through efficient mobilization of local revenue resources
• Municipality has been mobilizing both sources of revenue
in order to meet the growing needs and expectations of
local inhabitants.
• Internal sources of revenue are more stable and
consistent
• The existing capacities of municipality in terms of revenue
mobilization have to be improved