Municipal Revenue Enhancement Project


Nepal faces critical challenges in achieving fiscal autonomy and accountability at the local government level, undermining effective governance. Through this project, Switzerland supports Nepal to directly confront these issues by strengthening local governments’ capacity to generate revenue and deliver essential services. By engaging at the local government level, where citizenstate interactions are most tangible, the project will demonstrate the benefits of inclusive federalism.

Pays/région Thème Période Budget
Népal
Gouvernance
nothemedefined
Organisations contre la corruption
Gestion des finances publiques
Mobilisation des ressources intérieures
Technologies de l’information et de la communication (TIC)
Décentralisation
01.07.2024 - 31.12.2029
CHF  6’115’000
Contexte The rollout of federalism in Nepal posits local governments as drivers of greater inclusion, more participatory governance and higher living standards. However, these prospects face significant challenges due to the fact that local governments‘ performance in own source revenue generation has been suboptimal so far. Between 2022 and 2024, it amounted to less than 7%. While own source revenue performance varies across municipalities, for most, inter-governmental fiscal transfers still remain their main source of financing. Frequent delays in the latter, unclear concurrent inter-governmental tax regimes, low incentives and support for local governments to effectively raise and strategically use own source revenue thus undermine local governments‘ fiscal autonomy and their capacity to deliver the expected range of services to their constituencies, ultimately, undermining the consolidation of federalism in practice. These are important reasons for Switzerland to support Nepal in strengthening public financial management, subnational entities‘ own source revenue generation and oversight mechanisms to address corruption and improve service delivery.
Objectifs Targeted local governments have greater  fiscal  autonomy  and deliver improved local services to their  constituents,  including women,  and  disadvantaged groups. 
Groupes cibles

Direct Target Group: Selected local governments with political commitment and willingness to engage in promoting a systemic approach to strengthening fiscal autonomy, accountability and inclusive services. In addition, federal government, provincial governments and development partners will be engaged through policy dialogue and cross-learning platforms.  

Indirect Target Group: Citizens of Koshi and Bagmati Provinces, especially women and disadvantaged groups, who will benefit from improved municipal revenue and services.

Effets à moyen terme

OUTCOME 1: Selected local governments’ own source revenue collection and tax  compliance is fair, efficient, effective and transparent.

OUTCOME 2: Selected local governments‘ public service delivery systems and procedures are managed effectively and inclusively, efficiently and transparently.

OUTCOME 3: All levels of government share learnings on own source revenue management, draft better informed and inclusive public finance management policies and scale up own source revenue programs. 

Résultats

Principaux résultats attendus:  

Output 1.1 Local governments and ward staff have improved capacity to strategically plan and manage own source revenue in a gender responsive, inclusive and equitable manner.

Output 1.2 Local governments‘ own source revenue policies and systems are optimized and compliant with local government, provincial, national public finance management guidelines.

Output 1.3 Citizens, including women and disadvantaged groups, in targeted local governments have increased awareness and incentives for tax compliance .

Output 2.1 Local governments have increased efficiency, transparency and gender responsiveness in the service delivery lifecycle, with focus on planning, budgeting and procurement.

Output 2.2 Local governments‘ accountability and inclusive civic engagement practices in service delivery processes are enhanced and compliant with Local Government Operations Act.

Output 3.1 National public finance management legislation, policies and programs for sustainable and inclusive own source revenue practice are informed by shared learning from municipal, provincial and national levels.

Output 3.2 Local governments establish and enhance intermunicipal horizontal knowledge sharing and learning on own source revenue and service delivery.


Principaux résultats antérieurs:  

Assessment: 

Fiscal autonomy derived from own source revenue generation offers local governments a level of fiscal stability and ultimately functional legitimacy. With higher own source revenue, the local governments are in a better position to offer services to people in an inclusive and accountable way, prioritize spending and demonstrate results for strategic priorities over multiple years, including gender-responsive budgeting.


Direction/office fédéral responsable DDC
Partenaire de projet Partenaire contractuel
Secteur privé
  • Secteur privé étranger Nord


Coordination avec d'autres projets et acteurs This project will establish coordination and synergies with Switzerland’s other strategic projects under its Federal State Building Domain within the Swiss Cooperation Programme Nepal 2023-2026.  
Budget Phase en cours Budget de la Suisse CHF    6’115’000 Budget suisse déjà attribué CHF    24’786 Projet total depuis la première phase Budget de la Suisse CHF   21’949 Budget y compris partenaires de projet CHF   18’150’000
Phases du projet Phase 1 01.07.2024 - 31.12.2029   (Phase en cours)