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TREE Inception Report TREE Inception Report 1 November 2017 – 15 March 2018 The Hague, March 2018 Table of contents 02 March 2018 TREE Inception Report VNG International Hans Buis Table of contents 03 Table of contents List of abbreviations _________________________________ 4 About TREE ________________________________________ 5 Findings ___________________________________________ 6 Detailed report of activities ____________________________ 8 Annexure A - Participating MMDAs ____________________ 13 Annexure B - TREE Planning 2018 _____________________ 14 March 2018 TREE Inception Report VNG International Hans Buis List of abbreviations 04 List of abbreviations CAGD Controller and Accountant General’s Department FDU Fiscal Decentralisation Unit of the Ministry of Finance GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit (German Agency for International Development Cooperation) MLGRD Ministry of Local Government and Rural Development MMDA Metropolitan, Municipal and District Assemblies MoF Ministry of Finance LGS Local Government Service OHLGS Office of Head of Local Government Service TREE Tax Revenue for Economic Enhancement March 2018 TREE Inception Report VNG International Hans Buis About TREE 05 About TREE Characteristics The Tax Revenue for Economic Enhancement (TREE) project consists of two main aspects: (i) increase of revenues in order to (ii) improve services and economic growth. During the inception phase, it was decided to use the name TREE for the project, because it covers these main aspects: Methodologically, the project is characterised by its revenue collection-led strategy, which places priority on improving the revenue collection and enforcement processes in 33 Metropolitan, Municipal and District Assemblies (MMDAs) in the Central, Western and Ashanti regions of Ghana.1 This is contrary to the traditional valuation-pushed implementation strategy, which places fiscal cadastre information and property valuations at the centre. In the TREE strategy, the valuation-pushed strategy is seen as complementary to the applied revenue collection-led strategy. Another significant characteristic of the TREE project is the social accountability that goes hand in hand with decision-making on the expenditure in MMDAs of the additional revenue collection resulting from the project. MMDAs are required to explain that tax revenues are spent on improved services, to be able to realise a sustainable funding cycle of revenue collection and spending year after year. Background In November 2017, the Netherlands Embassy in Ghana awarded VNG-International a grant to support MMDAs in Ghana on improving revenues from local taxation and the quality of basic services. The project is implemented together with VNG International’s Ghanaian partner MAPLE Consult. Close cooperation is being pursued with the Ministry of Finance (MoF) and the Ministry of Local Government and Rural Development (MLGRD) as well as the Office of the Head of Local Government Service (OHLGS) in Ghana. These parties are participating in the Steering Committee of the project. VNG International together with MAPLE Consult will assist 33 MMDAs in Ghana in the Central, Ashanti and Western regions for a period of 4 years, ending December 31st, 2021. Specific objectives The specific objectives of the TREE project are: - To improve the institutional capacity and procedures of each MMDA to collect revenues and diminish the tax gap; - To implement IT programmes in each MMDA to support the main tax business processes; - To improve the capacity of each MMDA to communicate with its citizens through citizen engagement sessions; - To implement participatory planning processes including social contracts with citizens; - To realize political commitment and leadership support and project management expertise at the ministerial level and in each MMDA to guarantee sustainability. Support Throughout the entire duration of the project a Ghanaian team of experts will provide direct and continuous support at Ministerial and MMDA levels. The Ghanaian team will be complemented with specialist support from VNG International. The Ghanaian team together with the MMDAs will determine what kind of content and type of support is needed from the Dutch experts. 1 Originally the TREE project targeted 32 MMDAs, but in the course of the inception phase a 33th MMDA was added. March 2018 TREE Inception Report VNG International Hans Buis Findings 06 Findings The inception phase started November 1st 2017 and ended March 15th 2018 and its aim was to select and formally engage teams of experts in Ghana and in the Netherlands, securing ownership at Ministerial level, and agree on plan and planning. All objectives for the phase have been met, therefore, the inception phase can be regarded as very successful. To mention the results: Conditions for implementation are in place, a good start was made on anchoring the project at Ministerial level, the project is widely acknowledged as being in line with the main Ghanaian government’s intention of pursuing a political and economic strategy of ‘Ghana Beyond Aid’, strategy and planning was thoroughly discussed and adjusted, and awareness of the project became very manifest amongst MMDAs and to the general public, through the Ghanaian media. At the end of the inception phase, the following can be concluded in summary: 1. All planned conditional activities have been implemented effectively, varying from the appointment of a committed team in Ghana, selection of MMDAs, setting up the Steering Committee, to renting and furnishing office space for the Ghanaian team in Cape Coast; 2. Securing ownership at Ministerial level to the TREE project has been realised by having meetings introducing TREE. Commitment is indicated by chairing and otherwise participating in the Steering Committee and the high level of attendance of Ministerial representatives in the kick-off meeting. The Ministerial commitment is not only of great importance for the implementation of the TREE project in the coming years, but also for the continuity and sustainability of the intervention after the project has come to an end in 2021. The Fiscal Decentralisation Unit (FDU) of the Ministry of Finance has accepted ownership for the project and is chairing the Steering Committee. 3. Many activities have been implemented, of which one activity has been added and one has been brought forward in time compared to the original planning. An additional activity was a comprehensive kick-off meeting in March 2018; and brought forward in time, was the strategy workshop, originally foreseen to take place in May 2018. 4. In the strategy workshop, the Steering Committee agreed on a collection-based strategy and the development of a new reference model for revenue collection in all participating MMDAs. In this new reference model, all modernisations as prioritised during the workshop (indexing, flat rates, zonal approach, e-billing, e-payments and new enforced collection measures) will be integrated to one revenue collection process. 5. There is great enthusiasm for participating in the TREE project in the selected MMDAs that became also clear in the high level of presence of MMDA representatives in the kick-off meeting. 6. In addition to the high political attention, a lot of publicity is generated in Ghana on the TREE project; this is mainly due to the kick-off meeting, which enabled the 'branding’ of the TREE project as well. 7. On the basis of the conclusions of the strategy workshop, the general plan of approach and the planning of activities is finalized and agreed on. March 2018 TREE Inception Report VNG International Hans Buis Findings 07 8. It required more time than expected to get to the right design of the baseline assessment. The questionnaires have been prepared and validated by the FDU of the Ministry of Finance. The interviews for the first 16 MMDAs will take place with effect from April 8, and of the second group of 17 MMDAs in July. The assessment report is expected to be ready by the end of August 2018. The state of affairs at the end of the inception phase is that the TREE project has had a successful jump start. All is in place for the actual implementation. It generated high expectations at both Ministerial and MMDA levels, which is an exciting, but also demanding challenge for all parties involved. March 2018 TREE Inception Report VNG International Hans Buis Detailed report of activities 08 Detailed report of activities Conditional activities Project implementation started on 1st November 2017. Pre-selection of appointed team members in Ghana and contracting of seven VNG International experts took place. Consultation with the Ghanaian partner MAPLE Consult let to a signed agreement in December. The first mission to Ghana of VNG International experts took place from 4th to 8th December 2017 which resulted in: 1. The draft selection of 32 MMDAs, adjusted and eventually approved by MoF and of MLGRD in January 2018. 2. The final selection of Ghanaian team members resulting in two contracts signed per 1st of December 2017, and two per 1st of January 2018. Two signed contracts will come into effect on 1st of April 2018. 3. The decision to organise a kick-off meeting to publically launch the TREE project was taken in close consultation with the involved Ministries. 4. The decision was taken to bring forward in time the strategy workshop to enable commitment of MoF, MLGRD, OHLGS, and Regional Coordinating Councils (RCCs) of the three targeted Regions in the most early possible time. 5. The first draft of the questionnaires
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