Support to Reform the Local Government Finance Act

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Elizabeth Mwambulukutu<emwambulukutu@outlook.com>, David Nyange<nyange@msu.edu>, David Tschirley<tschirle@msu.edu>, and Isaac Minde

Elizabeth Mwambulukutu, David Nyange, David Tschirley, and Isaac Minde. Support to Reform the Local Government Finance Act. ASPIRES team, 2016. Policy Reform Brief No. 2

KEY MESSAGE

At the request of President’s Office – Regional Administration and Local Government (PO-RALG), Michigan State University conducted a study which examined the issue of produce cess. This study paved the way for important reforms of the Local Government Finance Act (LGFA).

Key features of the proposed amendment, which is set to go to cabinet by end of 2016, include:

(a) reduction in cess on traditional cash crops from 5% to 3%;
(b) reduction on food crops from 5% to 3%, then later to 1%;
(c) stipulation that rates be equal across LGAs,
(d) reduction in the number of rates for non-agricultural products, and
(e) establishment of a national Local Government Tax Appeals Board to hear taxpayer complaints regarding all local taxes

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Authors

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Department of Agricultural, Food, and Resource Economics Feed the Future Innovation Lab for Food Security Policy