TREE Inception Report
1 November 2017 – 15 March 2018
The Hague, March 2018
Table of contents 02
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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
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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
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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
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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.
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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.
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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 for the baseline studies on four subjects (processes, tax gap, communication, human resources). 6. Rent of office space in Cape Coast for the Ghanaian team members and purchase of office equipment, (e.g furniture, computers, printer, air condition etc). The rental contract was signed in December 2017. The office was up and running on 2nd of January 2018. 7. The decision to use TREE as the name of the project and to develop materials for communication in a branding style with the intention to make the project Ghanaian.
A full report of the mission is available.
Securing ownership at Ministerial level
To secure ownership at Ministerial level, several separate meetings took place between MoF, MLGRD and VNG International experts and MAPLE Consult on the objectives, approach and desired outputs of the TREE project. This resulted in the formal participation in the Steering Committee of two representatives of MoF (the Deputy Director of Budget is chairing), and one representative each of MLGRD, OHLGS, the Controller and Accountant General’s Department (CAGD), the Central, Ashanti and Western Regional Coordinating Councils. The Director of MAPLE Consult and the TREE Project Coordinator also form part of the Steering Committee.. The maiden meeting of the Steering Committee took place on 15th of February 2018 in Elmina and was besides the members mentioned above, also witnessed by representatives of the Royal Netherlands Embassy, VNG International, MoF and MAPLE Consult. The meeting underlined the approach of the TREE project and the role of the Steering Committee in the project. The selection of 32 MMDAs was formally approved and the overlap with other projects dealing
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Detailed report of activities 09
with tax revenue of MMDAs like the GIZ project was discussed. The composition and frequency of meetings per year was decided on. Commitment to the TREE project was indicated in speeches addressed at the kick-off meeting on behalf of the Minister of Finance and the Minister of Local Government and Rural Development.
A full report of the maiden Steering Committee meeting is available.
Strategy workshop
On the 13th and 14th of February, 2018, the strategy workshop was organised, originally foreseen to take place in May 2018. To enable ownership of Ministries and other important national entities to the TREE project, and to design a clear road to the kick-off meeting in March, the strategy workshop was brought forward in time. The workshop was attended by a range of high-level stakeholders; including officials from MoF, MLGRD, OHLGS, the CAGD, the Royal Netherlands Embassy and the Regional Coordinating Councils of the Central, Western and Ashanti regions.
The objectives of the strategy workshop were to: • Introduce project TREE, • Get a common understanding of weaknesses in MMDAs’ revenue collection, • Form a common understanding on the importance of strategy, • Get a shared view on potential opportunities and strategies, • Prioritise strategic measures for the next four years of project implementation.
During the workshop, a number of presentations and subgroup discussions were organised to ensure these objectives were fulfilled.
Inputs were given on the long-standing low performance of MMDAs regarding revenue collection that were proved by data. The current administrative and institutional weakness in MMDAs causing limited mobilisation were presented and the participants identified the weakness in revenue mobilisation. At the end of the exercise, participants highlighted the following strategies, which required priority attention: • Improve database quality and volume; • Taxpayer communication; • Application of software; • E-payments using Mobile Money or Banks; • E-billing via mobile phones.
There was consensus among the workshop participants with regard to both the weaknesses limiting MMDA’s mobilisation of revenues and the strategies that are required to resolve them.
The Steering Committee agreed on a collection-based strategy and the development of a new reference model for revenue collection in all participating MMDAs, as was proposed by the strategy workshop. In this new reference model, all modernisations as prioritised during the workshop ( for example indexing, flat rates, zonal approach, e-billing, e-payments and new enforced collection measures) will be integrated to one revenue collection process.
A full report of the TREE strategy workshop is available.
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Kick-off meeting
On the 14th of March, 2018, the official launch of the TREE project was organised in Cape Coast for the participating MMDAs by invitation of the Ministry of Finance. The kick-off meeting was chaired by the Omanhen (Chief) of the Oguaa (Cape Coast) Traditional Area. The event was attended by high-level officials; including the Central Regional Minister, the Deputy Minister for Local Government and Rural Development, the Head of the Local Government Service (LGS), the Director of the FDU of MoF, the Royal Netherlands’ Ambassador to Ghana as well as officials from the 33 participating MMDAs, among others.
A number of speeches and presentations were given. Osabarima Kwesi Atta II the Omanhen of Oguaa Traditional Area provided the event’s opening and closing remarks, while the Hon. Central Regional Minister, Mr. Kwamena Duncan provided a welcome address. Speeches were given by Mr. Peter Jongkind, the TREE Project Director; The Royal Netherlands’ Ambassador to Ghana, His Excellency Ron Strikker; and the Head of LGS Ing. Dr. Nana Ato Arthur. The speech by the Hon. Minister of Finance, Mr. Ken Ofori-Atta was read on his behalf by Mr. Joseph Antwi the Director of the FDU of MoF. The Hon. Deputy Minister for MLGRD Mr. Kwesi Boateng Adjei officially launched project TREE. Mr. Bless Kwame Darkey, the TREE Project Coordinator presented the implementation strategy and schedule of commencement of project activities in the 32 participating MMDAs.
All speeches welcomed the TREE project and stated its implementation comes at the right time in Ghana: it will contribute to the success of the concept of ‘Ghana Beyond Aid’. The kick-off meeting showed a high level of commitment of both the national level represented by Ministries and OHLGS and the local level, indicated by the high number of MMDAs representatives present. Moreover, the speeches that the senior officials made, highlighted to officials of the MMDAs in attendance the critical role that the TREE project will play in increasing revenue mobilisation and thereby improving their capacity to deliver services to community members.
Additionally, as a result of the suggestions of Hon. Central Regional Minister, Mr. Kwamena Duncan, Hon. Deputy Minister for MLGRD, Mr. Kwesi Boateng Adjei, the Head of LGS Ing. Dr. Nana Ato Arthur, it was decided that Asikuma Odobeng Brakwa District Assembly would be included in the TREE project and that the number of participating MMDAs was therefore expanded from 32 to 33.
Screening of two videos underlined the commitment of Ministries and MMDAs on the one hand and the views on revenue collection for better service delivery of community representatives on the other hand. The shooting of footage for the video presentation took place by the communication team of the TREE project in February 2018.
In total, 144 people participated in the official launch of the TREE project.
A full report of the TREE kick-off meeting is available.
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Detailed report of activities 11
MMDAs
Three draft questionnaires regarding the state of the art in MMDAs regarding (i) Tax Gap, (ii) Process & Organisation, and (iii) Communication were piloted in Cape Coast Metropolitan Assembly and Abura Asebu Kwamankese District Assembly in February 2018. Both Ghanaian and Dutch TREE-team members held interviews with MMDA staff concerned. Answers received were registered; processed; and observations were made as to what questions, terms and assumptions were not properly understood by the interviewed. Suggestions to improve the format and the content of the questionnaires were discussed and led to adjustments of the questionnaires.
A power point presentation of the preliminary analysis of the two pilots is available.
The piloting showed that the design of the questionnaires needed some more work to be able to collect effective data. Eventually it was decided to set up four questionnaires: (i) Tax Gap, (ii) Tax Administration Process & Organisation, (iii) Communication with Citizens, and (iv) Tax Administration and Human Resources. The four questionnaires are finalized and approval by MoF. After two years the second measurement will take place to be able to monitor improvements regarding revenue collection and capacity developed.
Both, the piloting and the kick-off meeting indicated the enthusiasm for participating in the TREE project in the selected MMDAs The fact that 33 MMDAs were represented in the kick-off meeting expressed the willingness to participate in the TREE project
A list of participating MMDAs is attached in annexure A.
Publicity
Corporate House style and protocol of Corporate Project Communication has been developed to support the effective implementation of the TREE project. The project has to be easy recognizable as a Ghanaian driven project, in line with the guidelines of the Royal Netherlands Embassy. A “TREE Story” and TREE flyer were developed also for the reason to give support to the implementation. The Corporate TREE style can be found in the use of the TREE logo, letterhead, banner, website design. Next to the registration of the domain name ‘tree’ for the website, a QR-code and ‘tree’ email addresses have been registered.
A lot of publicity has been generated from the kick-off meeting. Fifteen Ghanaian journalists were present at and have reported on the kick-off meeting. This resulted in 18+ online reports, 8 broadcast news items, 1 printed article and 1 printed editorial in the Daily Graphic (1.5 million readers a day).
A Media Monitoring Report on the kick-off meeting is available.
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General plan of approach and planning of activities 2018 12
General plan of approach and planning of activities 2018
The plan of approach and the planning is generally agreed on by the stakeholders (see report on strategy workshop above). However, small changes in the approach will apply. Resulting from the discussions in the strategy workshop and with Ministries, the Handbook on Revenue Collection and the Handbook on Building Permits and the Communication Strategy on Tax Collection will take the form of the development of hands-on Solution Designs, leading to ready to implement Solutions Guides. Next to mass communication by MMDAs, capacity development supporting inter-personal communication will be stressed. It has been decided to make use of Ghanaian expertise for the inter-personal communication instead of a VNG International expert. This is because Ghanaian expertise will have a far more better understanding of what is needed and no cultural differences are to overcome. This will result in an additional team member to the Ghanaian team. The VNG International expert will provide general expertise regarding the issue.
New issues will be addressed in the coming months of which e-billing as an option for payment of revenues is the most important. Next to technical aspects, legal aspects have to be taken into account regarding this issue.
For the moment, the changes will have no effect on the allocation of budget to the different modules.
In the inception phase, meetings have taken place on the issue of software application for revenue collection with GIZ which implements the “Good Financial Governance” project. It is agreed to avoid overlap concerning software and to harmonize activities in the MMDAs where both projects are implemented. The next step will be an in-depth analysis of the software used in the “Good Financial Governance” project.
The planning for the coming year has become more precise. The baseline study in the first cluster of 16 MMDAs takes place from 9 April to 3 Mai 2018. The second cluster will take place from 8 July until 2 Augusts 2018.
The inceptive TREE workshops for the first cluster of 16 MMDAs will take place in June.
Development of Solution Designs will start in April 2018 (Property Value, Fee-fixing, Flat rate, Zonal Approach, Communication, Enforcement, e-Billing, Software and IT implementation). Solutions Guides on Process, Enforcement and Communication will be finalised in August 2018, consequently the implementation of training workshops in the first cluster of MMDAs will take place from September 2018 onwards.
A revised planning scheme is attached in annexure B.
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Annexure A - Participating MMDAs (Clustered) 13
Annexure A - Participating MMDAs (Clustered)
Cluster `1 (Core Central) – 8 MMDAs Cluster 2 (Western/Central) 8 MMDAs
Ekumfi District Assembly Cape Coast Metropolitan Assembly
Gomoa Central District Assembly – Afranse Komenda Edina Eguafo Abirem Municipal Assembly
Gomoa West District Assembly Shama District Assembly
Efutu Municipal Assembly Ahanta West District Assembly
Agona East District Assembly Nzema East Municipal Assembly
Assin Central Municipal Assembly – Assin Abura Asebu Kwamankese District Assembly Foso
Assin South District Assembly Mfantseman Municipal Assembly
Ejumako Eyan Esiam District Assembly Asikuma Odobeng Brakwa District Assembly
Cluster 3 (Core Ashanti) – 9 MMDAs Cluster 4 (Ashanti/Western/Central) – 8 MMDAs
Ejisu Municipal Assembly Atwima Mponua District Assembly
Bekwai Municipal Assembly Obuasi Municipal Assembly
Bosomtwe District Assembly Upper Denkyira East Municipal Assembly
Atwima Kwanwoma District Assembly Upper Denkyira West District Assembly
Kwabre East Municipal Assembly Bibiani – Anhwiaso – Bekwai District Assembly
Afigya Kwabre South District Assembly Sefwi – Wiawso Municipal Assembly
Asokore Mampong Municipal Assembly Wassa Amenfi Central District Assembly
Sekyere East District Assembly Adansi North District Assembly
Atwima Nwabiagya Municipal Assembly
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Annexure B - TREE Planning 2018 14
Annexure B - TREE Planning 2018
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Annexure B - TREE Planning 2018 18
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