0w2010 01 RESUM EJECUTIVO 03 DEFcarta ang
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Second Global Report on Decentralization and Local Democracy. GOLD 2010 EXECUTIVE SUMMARY
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Where significant differences in administrative capacity at the local level persist, it may be desirable to introduce temporarily asymmetric competencies, with two or at most three different packages of expenditure responsibilities that can be devolved to local governments.
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Region-wide transparent approaches should be adopted to translate the assignment of functional responsibilities into expenditure needs.
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be desirable to un-bundle part of the revenue sharing system into separate transfers, including: (i) an equalization transfer with unconditional use of funds and (ii) a system of block conditional grants for current and capital purposes. •
Greater local revenue autonomy is a challenge not yet being adequately addressed. There is a need to find a better balance between the decentralization of expenditure responsibilities and the authority to collect local taxes from the residents directly benefiting from local services.
An explicit unconditional equalization grant is needed to address the important and increasing problem of regional fiscal disparities in many countries in the region—based on differences in tax capacity or economic base and differences in expenditure needs due to geography or the structure of population.
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Explicit conditional grants are necessary to ensure national standards and objectives in the provision of important services that have been decentralized, such as education and health.
– Countries that have not assigned property tax to local governments should do so.
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In those countries where local borrowing is not allowed, new legislation should introduce the possibility of responsible local borrowing. In those countries that already allow municipal borrowing, it would be desirable to review the current status of regulations, streamlining them when necessary so that they are not overly restrictive.
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Facilitate a significant increase in credit availability to local governments for responsible borrowing, especially for smaller municipalities, including the creation of official financial intermediaries or municipal banks, operating with strict banking criteria.
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Policies to encourage the development of private markets for local credit are equally, or even more, desirable.
– Other taxes that should be assigned to local governments are, for example, vehicle taxes, business licenses, and betterment levies on real estate for financing basic infrastructure improvements. – Some degree of discretion in setting tax rates should be granted to all local governments, within legislated maximum and minimum rates. – Consider the introduction of new taxes assigned to the local level including wider use of betterment levies and local business taxation, such as the ICA (taxes on the industrial and commercial activities) in Colombia or Chile’s municipal licenses. •
In those countries where revenue sharing is a major source of local finance, it would
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