Effective Debt Management in Unified Property Tax and Industry and Commerce - Colombia


  • SOLICITATION NUMBER: 0002008625
  • INSTITUTION:  IBRD/IDA
  • ASSIGNMENT LOCATION: Colombia
  • ISSUE DATE AND TIME: May 01,2024 05:47
  • CLOSING DATE AND TIME: May 13,2024 23:59

In recent years; Switzerland; through the State Secretariat for Economic Affairs (SECO) and the World Bank; has supported both the Government of Colombia (GdC) and subnational governments under the institutional program known as Ciudata+.This program supports decentralization in Colombia; enhancing municipal autonomy and planning by improving territorial information management; fiscal performance; and territorial planning. It focuses on capacity building at the municipal level for data management; tax collection; and application of land value capture instruments. Additionally; it fosters dialogue between municipal governments and the National Government to share knowledge on land management and fiscal administration.During its diagnostic phase; The CiuData+ program identified a high tax debt in the unified property tax (IPU) and; to a lesser extent; in the industry and commerce tax (ICA) across the diagnosed municipalities. Key issues contributing to this include:•                Inadequate institutional divisions equipped with human and technological resources for effective collection.•                Challenges in handling collections due to insufficient personnel and resources.•                Absence of control and follow-up systems for delinquent taxpayers.•                Lack of a clear and enforceable tax collection title.•                Payment capacity issues among taxpayers.•                Inefficiency in identifying and excluding tax-exempt properties and special legal conditions.•                Communication barriers between tax administrations and taxpayers.•                Weak tax culture among taxpayers.Addressing the complex challenges associated with the tax portfolio in CiuData+ pilot municipalities require a comprehensive approach considering various institutional; economic; social; and political factors. By implementing the recommended strategies and lessons learned; municipalities can strengthen their revenue collection capacity; improve tax administration; and reduce tax debt and dependence on national transfers; serving as a reference for national tax policy.The consultancy aims to provide technical support to municipalities for efficient tax debt management associated with IPU and ICA.

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