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The Addis Ababa City Administration has announced plans to revise municipal service revenue tariffs, based on a study by the Finance and Economy Development Bureau. The new Administration, led by Mayor Diriba Kuma, that came to power two weeks ago, expects to collect 2.3 billion birr from municipal service revenue, according to the city budget for the 2013/14 fiscal year.
Last year (2012/13), 1.6 billion birr was raised from municipal service revenue. This year’s projected total is 700 million birr or 43% higher than the equivalent figure last year.
In its annual report for the current year, the city’s Finance and Economic Development Bureau said the tariff adjustment will contribute to the city’s budget, alongside other revenue sources such as tax and non-tax revenue.
The municipal service revenue includes fees for trash collection, municipal user fees, profits from municipalitly operated utilities and service charges from municipal services and programmes.
Getachew Mekuria, communication office head of Finance and Economic Development Bureau, said research on the increase is underway: “Lower level relevant offices in the city and the bureau will give their inputs on the new study before it passes to the city cabinet for final approval,” he told Capital.
He said that the new adjustment is mainly focused on the improvement of the baseline, rather than increment in the oldest fees. He said that the study mainly focuses on the implementation that will not impact the lower class of the society in the city.
It is also expected to include other new fee directions to expand revenue collection under the municipal service revenue.
The council has already approved this fiscal year’s budget of more than 20 billion birr. It expects to collect the estimated amount through tax collection, non tax collection, government offices and through funds among others. It has increased by 26.6 percent compared with the past year.
Out of the total budget, around 6.8 billion is targeted for recurrent budget, more than 12 billion for capital budget and more than one billion birr is set aside for contingency, in order to finance institutions requiring more money than they estimated in their original budget.
According to the city budget report, excluding the 2.3 billion birr municipal service revenue, the city will collect 14.1, 2.2 and 1.1 billion birr respectively from tax revenue, non-tax collection and offices internal revenue and it has also included 189 and 39 million birr from Road Fund Office and assistance.
In order to meet the increasing demand of government institutions, the city plans to increase its revenues to 24 billion, in 2014/15, and 30.5 billion by 2015/16, according to the mid-term expenses framework.