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Utilizing Gis to Support Municipal Tax Collection Planning and Local Governance Project (Plgp) in Albania

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Utilizing Gis to Support Municipal Tax Collection Planning and Local Governance Project (Plgp) in Albania UTILIZING GIS TO SUPPORT MUNICIPAL TAX COLLECTION PLANNING AND LOCAL GOVERNANCE PROJECT (PLGP) IN ALBANIA MAY 2015 This publication was produced for review by the United States Agency for International Development. It was prepared by Tetra Tech. This publication was produced for review by the United States Agency for International Development by Tetra Tech, through USAID Contract Number AID-182-C-12-00001, Planning and Local Governance Project (PLGP) in Albania. Author: Emiko Guthe, Geospatial Technologies Unit, Tetra Tech This report was prepared by: Tetra Tech 159 Bank Street, Suite 300 Burlington, Vermont 05401 USA Telephone: (802) 495-0282 Fax: (802) 658-4247 E-Mail: [email protected] Tetra Tech Contacts: Kevin McLaughlin, Senior Technical Advisor/Manager Tel: (802) 495-0282 Email: [email protected] Don Cuizon, Project Manager Tel: (802) 495-0282 Email: [email protected] UTILIZING GIS TO SUPPORT MUNICIPAL TAX COLLECTION PLANNING AND LOCAL GOVERNANCE PROJECT (PLGP) IN ALBANIA MAY 2015 DISCLAIMER The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government. ALBANIA PLGP: UTILIZING GIS TO SUPPORT MUNICIPAL TAX COLLECTION i CONTENTS ACRONYMS .................................................................................................................. III EXECUTIVE SUMMARY ................................................................................................ 1 1.0 LEGAL FRAMEWORK......................................................................................... 2 1.1 IPRO AND ALUIZNI ........................................................................................ 2 1.2 TERRITORY REGISTER ..................................................................................... 2 1.3 ANTICIPATED CHANGES TO PROPERTY TAX SYSTEM ......................................... 2 2.0 APPROACH ......................................................................................................... 1 2.1 GIS PROCESS FOR MUNICIPAL TAXATION ......................................................... 1 2.1.1 Start from Base Layers ................................................................... 2 2.1.2 Address System ............................................................................. 3 2.1.3 Property Inventory .......................................................................... 3 2.1.4 Territory Register to Tax Register .................................................. 4 2.2 GUIDING PRINCIPLES ....................................................................................... 4 2.3 GIS RESOURCES ............................................................................................. 5 3.0 RECOMMENDATIONS ........................................................................................ 6 3.1 TIRANA ............................................................................................................ 6 3.2 KORÇA ............................................................................................................ 6 3.3 FIER ................................................................................................................ 7 3.4 MODEL MUNICIPALITIES (BERAT, ELBASAN, KUÇOVA, LUSHJNE) ........................ 8 3.5 OTHER PARTNER LGUS (KAMZA, PATOS, SARANDA, VLORA, VORA) .................. 9 4.0 NEXT STEPS ........................................................................................................ 1 ALBANIA PLGP: UTILIZING GIS TO SUPPORT MUNICIPAL TAX COLLECTION i ACRONYMS ALUIZNI Agency for Legalization of Urban Informal Zones and Buildings ASIG State Authority for Geospatial Information GIS Geographic Information System GPS Global Positioning System IMF International Monetary Fund IPRO Immovable Property Registration Office LGU Local Government Unit PLGP Planning and Local Governance Project TAR Territorial Administrative Reform USAID United States Agency for International Development WMS Web Map Service ALBANIA PLGP: UTILIZING GIS TO SUPPORT MUNICIPAL TAX COLLECTION iii EXECUTIVE SUMMARY Property tax is an important, stable source of revenue for Albanian municipal governments, but current systems for tax collection and administration are in need of improvement. This report explores how geographic information systems (GIS) can be utilized to assist municipalities to increase the scale and effectiveness of their own-source revenues. Based on findings from a two- week assessment, these recommendations provide feasible, practical steps that will enable municipalities to operationalize GIS tools to facilitate property tax collection and administration through the construction of a functional tax register. Utilizing GIS tools to create a functional tax register will provide municipalities with a critical first step in the tax cycle; enabling each municipality to invoice its tax base. Property tax is based upon geographic features that exist on the earth’s surface—buildings, parcels, agricultural land, etc.—and thus can be mapped in a GIS. Using GIS for property tax purposes allows municipalities to collect data about what exists on the ground, manage spatially referenced data in a database and then utilize this information for analysis, reporting, transparency and decision making. In order to increase revenue from property taxes, municipalities in Albania must first build a complete tax register, or property register, to understand who taxpayers are and where they are located. Essential in this process is the need to create an actionable addressing system. Korça and Fier have both utilized GIS tools to create a property inventory and their experiences provide valuable lessons learned and best practices for other municipalities. Each of PLGP’s partner municipalities will need to complete a comprehensive tax inventory for new municipal areas mandated by the Law on Territorial Administrative Reform, which restructured and consolidated local governments resulting in much larger territories for partner municipalities. Recommendations on property tax in Albania must address the question of central datasets. While Immovable Property Registration Office (IPRO) data officially comprises the property tax database, it is often not a useful or actionable dataset for most partner municipalities. IPRO data, and other central datasets, are discussed in subsequent sections of this report (1.1 and 2.1.1). Though the goal of any property tax register should eventually integrate IPRO data, the recommendations in this report focus on short term actions to create a functional municipal tax register utilizing GIS tools. This report consists of four main sections. Section 1.0 examines the legal framework for property tax in Albania from a GIS perspective. Section 2.0 draws upon the experiences of Fier and Korça to provide an overview of how GIS tools can be utilized to establish a functional municipal tax register. Section 3.0 provides recommendations for municipalities by evaluating their current status and recommending next steps. Section 4.0 gives general next steps for completing this work. ALBANIA PLGP: UTILIZING GIS TO SUPPORT MUNICIPAL TAX COLLECTION 1 1.0 LEGAL FRAMEWORK 1.1 IPRO AND ALUIZNI The current legal framework for property taxation in Albania is comprised of two official data sources: Immovable Property Registration Office (IPRO) and ALUIZNI. As detailed in other reports, the current law taxes buildings and agricultural land, but not urban land. Businesses and residential properties have different tax rates, which are quite low for family taxpayers. ALUIZNI is the legalization and formalization process for informal buildings that have cropped up across the Albanian landscape. Scheduled to be completed by the end of 2017, the ALUIZNI process will legalize an estimate half million buildings while other structures are being and will be destroyed. IPRO is the official source for property tax in Albania. Properties legalized through the ALUIZNI process will be incorporated into IPRO data. IPRO has been working for over a decade to create an electronic legal property register and database, which is an essential tool for property tax administration. However, several issues keep IPRO data from serving as a functional tool for most municipalities. From various meetings throughout the assessment, IPRO data has been determined to be incomplete, out-of-date, and not accessible to those outside of IPRO. Though IPRO is required by law to hand over data to municipalities, this transfer does not happen in a functional manner. Municipalities either do not have any IPRO data or receive the data in a format that is not operational for municipal governments. As other reports have also determined, at this time, IPRO data is not a functional tool for most municipalities due to both data quality and communication shortfalls. 1.2 TERRITORY REGISTER The Law on Territorial Planning and Development mandates an “integrated territory register” which provides, “Registration of the physical and legal information, and of the public and private rights or restrictions to land and the transformation it undergoes because of development” (Chapter V, Article 54). The territory register consists of “GIS databases [that] shall be managed by the planning authorities and the other public institutions, at the national and local level, in line with the responsibilities determined by this Law and the effective legislation” (Chapter V, Article 55).
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