Haiti must commit to tax system for communes to be economically sufficient

By Bobb Rousseau, Diaspora Matters Columnist

In Haiti, when it comes to economic development, the tendency is that the communal section lacks the necessary financial capacity to provide public services to its residents.  Such a propensity could not be further from the truth. Taking into account its patrimony rich in natural resources, built properties, and taxable infrastructures, contrary to the political belief, it has unlimited potential to become fiscally self-sufficient.

This trend of its economic incapacity relates to the dogmata that the local governments lack the administrative and fiscal intellectuality crucial to mobilize the resources of the communal section to collect taxes to increase their tax base. It is also due to the absence of municipal assemblies that should have represented the collectivity in the indirect hierarchical structures and executive agencies so that it receives adequate regulatory assistance to achieve its functions. 

Haitian legislation, more particularly articles 61, 62, 66, 77, 200, 218, and 250 of the constitution and articles 89 to 116 of the decree of 2013 pursuing the general framework of decentralization as well as the principles of organization and functioning of Haitian local authorities, recognizes the communal section as the local authority at the base of economic development. Thus, it grants it 13 fields of intervention with fiscal powers that it can exercise to supply its budget. However, these functions remain unperformed because of a dearth of collaboration and partnership amongstthe CASEC, the population, the municipal council, and the local public administration.

The development of a taxation strategy is necessary to establish a campaign of fiscal awareness and social alliance that would identify the role of each body, conduct an inventory of the taxable resources, and formulates taxation-collecting procedures for the municipality.

In short, this strategy would determine the actual progressive taxes and the regressive taxes the collectivity must collect, the percentage of the collected taxes and duties that would go to the communal section, and their use towards the delivery of public goods and services.

The CASEC legally has jurisdiction over everything that is occurring in the local municipality. From the first five weeks of taking office, the law orders them to draw up five fundamental dossiers to gain a scientific knowledge of the municipal section. It must draw up an accurate geographical layout dossier for its territory as well as the dossiers of the demography, the identification of natural and financial resources, infrastructure, built properties, and the devolution to collect information on the representation of the central state in the communal section.

After drawing up these five dossiers, the CASEC must engage in a process of tax mobilization to define a tax base for the communal section by collecting the funds necessary to carry out projects for the community. However, to be effective, this tax mobilization must include all stakeholders in the community.

The first axis of tax mobilization consists in planning activities to identify all the actors of local devolution, namely CASEC of course, the police, the media, the municipal council, and the vice-delegate of the district to inform them about their role or to engage them directly in the process of collecting taxes. Technical teams with knowledge and experience in the areas of taxation, administration, and program management will support and reinforce the identified actors so they can assume their responsibilities according to the relevant law and guidelines set by the process of the tax mobilization campaign.

These teams already exist in several areas of the country, especially in the Palmes region (Gressier, Léogâne, Grand-Goâve, and Petit-Goâve) through the Administrative and Technical Department of the Intercommunality of Palms (DATIP). Such an instance exists to foster collaboration among the various social authorities of these municipalities while offering them technical and financial assistance for the implementation of various social programs.

The second axis would be the preparation of the fourth and fifth basic dossiers to carry out an inventory of all the resources of the communal section to draw up a detailed map of the location and the rental value of each building in the communal section. This axis would identify essentially the built properties of the municipal section to establish or apply the scale of the Land Contribution on Built Properties (CFPB), also called rental tax of which 90% goes to the relevant community pursuing the decree of September 28, 2015, establishing the General Budget of the Republic relating to the Land Contribution of Built Properties.

The third axis would be the awareness campaign and social alliance to transform public officials into communication agents to inform the public about the importance of paying their taxes, more particularly property taxes that constitute a large part of the base community tax. Various town halls recruit motorcycle taxi drivers who report new constructions to mayors. As true as it is a laudable strategy, it should be the competence of CASEC, because the issuing of delivery of building permits are perceived in a discretionary way and do not have any fiscal transparency. Better yet, the communal section receives none of these taxes although the built property is part of its territory.

It is not that the citizens refuse or cannot pay their taxes; it is rather that they do not know what part of their income, which of properties are taxable, and why to pay them so much that the majority of the owners disregard the CFPB slips they receive from municipal agents. The local government and the local agents of the DGI, the only entity responsible for collecting taxes and reconciling the accounts of each community for the central government, have the mission to educate residents in matters of good citizenship as well as discipline, awareness, and fiscal responsibility.

The focus of the tax mobilization campaign will be on the engagement and accountability of each authority in the management and administration of the community, the collection of taxes after an effective identification of local resources and infrastructure, citizen involvement, and the promotion of incentive strategies to convince the population to get actively involved in this mobilization.