Chapter 73:07 - Fiscal Transfers

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LAWS OF GUYANA LAWS OF GUYANA
FISCAL TRANSFERS ACT
CHAPTER 73:07
Act No.
16 of 2013
Current Authorised Pages
Pages Authorised (inclusive) by L.R.O. 1 -12 … 1/
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Note
on
Subsidiary Legislation
This Chapter contains no subsidiary legislation
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CHAPTER 73:07 FISCAL TRANSFERS ACT
ARRANGEMENT OF SECTIONS
SECTION
1. Short title. 2. Interpretation. 3. Garnering of resources. 4. Conditions for transfers. 5. Grants. 6. Fiscal transfers. 7. Treatment of Georgetown City Council. 8. Fiscal transfer for municipalities.
9. Fiscal transfer for neighbourhood democratic councils.
10. Regulations.
SCHEDULE
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CHAPTER 73:07
FISCAL TRANSFERS ACT
16 of 2013 An Act to provide for the obj e c t i ve c r i te r ia fo r the a l l oc a t io n o f re s ou r ce s t o l oca l a u tho ri t ie s a nd fo r ma t te r s c on ne ct e d the r e w i th .
Short title.
Interpretation.
1. This Act may be cited as the Fiscal Transfers Act 2013.
2. In this Act –
“donor agency” means a financial institution whose business includes lending money and making grants to countries or corporations including the World Bank, the Inter- American Development Bank, the Caribbean Development Bank, and the European Union;
“garnering” means measures designed to collect and boost the revenue of local authorities;
“local authority” means a municipal council, a neighbourhood democratic council, a village council, a community council, and any other similar organ;
“set of conditions” means the criteria used to determine the sum of money appropriated by Parliament annually to
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Garnering of resources.
local authorities and of which fifty percent is allocated equally among those local authorities with the remaining fifty percent being allocated to the local authorities in accordance to variables, such as population size, geographical area or stipulated performance indicators, which may be changed by the Minister by regulations;
“stipulated performance indicators” means the rate of collection of taxes by each local authority.
3. (1) Each local authority may, in addition to the authorised imposition of rates on immovable property within its boundaries, increase its revenues by garnering of resources by measures, including those mentioned in subsection (2).
(2) A local authority may –
(a) with the prior written approval of the Minister responsible for Local Government, such approval not to be unreasonably withheld and such approval or disapproval to be given within thirty-five days, approach donor agencies for financial and other resources in the form of grants which may be used to fund projects or employment costs;
(b) negotiate with central government for specific revenue sharing contracts;
(c) establish vehicular meters to charge for parking;
(d) establish and charge for vehicle parking facilities;
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Conditions for transfers.
(e) embark on revenue earning economic projects; or
(f) undertake any other measure agreed to by the Minister.
(3) A local authority may enhance its revenue by a fiscal transfer to it from another local authority taking into account the mutual benefits to the local authorities.
(4) The additional revenues shall, except where the Minister directs otherwise, be paid into the general revenue account of the local authority, from which account disbursements may be made in keeping with financial regulations governing such funds.
4. In order to be eligible for fiscal transfers, local authorities shall satisfy the following conditions –
(a) the budget estimates of a local authority for the following year shall be submitted to the given council by November 15 of the current year;
(b) the budget as submitted, shall include expenditure and revenue data relating to the last year for which actual expenditure and revenue data are available, along with the previous year’s budget estimates;
(c) the budget as submitted, shall include notes indicating the basis for all revenue forecasts, with specific regards to property rates, the percentage of billable rates collected or to be collected; with the notes also providing explanations for any differences in expected and actual collection of property taxes for all actual, budget and supplementary information required to be contained in that budget;
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Grants
Fiscal transfers.
Schedule
(d) final financial statements comparing actual and budget expenditure shall be prepared and submitted to the Minister by March 31st of the following year, together with an audited report required by other laws relating to local government;
(e) the budget shall disclose information in the form or manner that costs of all projects and activities involving capital expenditure can be identified, for measuring performance for the improvement in financial management;
(f) disclose performance indicators viz a viz percentage of actual collection rate and other revenue collections initiated by the local authority such as parking, market rates etc.;
(g) disclose population profile and new investments, expansion of businesses, new housing and agricultural schemes;
(h) any other condition the Minister may by regulations, subject to affirmative resolution of the National Assembly, prescribe.
5. The Minister may establish grants to any local authority.
6. (1) The annual subvention or fiscal transfers, from central government to local authorities, shall be based primarily on a set of conditions and stipulated performance indicators so as to form an aggregate sum referred to in the Schedule.
(2) In arriving at the determination of the annual subvention from central government to local authorities referred to in subsection (1) it is acknowledged that central government has a responsibility to provide financial resources to local authorities to supplement their own revenues and in order to assist them to discharge their functions and responsibilities.
(3) The revenues raised by the local authorities and shown in their respective budgets will be utilised in the discharge of their functions and responsibilities.
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Schedule
Treatment of Georgetown City Council.
(4) The aggregate sum referred to in subsection (1) shall be identified as a line item in the national budget.
(5) The fiscal transfers referred to in the Schedule shall be used to allocate financial resources to a local authority from the aggregate sum appropriated in the annual budget to local authorities.
(6) All grants or disbursements under this Act shall be aimed at improving the overall performance of the local authority.
(7) The fiscal transfers shall be governed by the formulae in the Schedule.
7. As the capital city, Georgetown City Council will be treated similarly in terms of the set of conditions required to be fulfilled by each local authority but differently and separately in terms of the actual financial allocation, as follows –
(a) it will receive 50% of its allocation automatically based on the available sums allocated by Parliament;
(b) Georgetown City Council formula for the balance of its allocation will be based on a defined set of criteria as follows –
(i) target of 60% minimum rate of collection of revenue;
(ii) stipulated allocation of 30% for population size; and
(iii) 10% for the geographic location.
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Fiscal transfer for municipalities.
Fiscal transfer for neighbourhood democratic councils.
Regulations.
8. (1) A sum equal to fifty percent of the sum appropriated by Parliament annually to municipalities shall be allocated equally among the municipalities.
(2) The remaining fifty percent of the sum appropriated by Parliament annually to municipalities shall be allocated to the municipalities in accordance with their population size, geographic area and rate of collection in accordance with the Schedule.
9. (1) A sum equal to fifty percent of the sum appropriated by Parliament annually to neighbourhood democratic councils shall be allocated equally among the neighbourhood democratic councils.
(2) The remaining fifty percent of the sum appropriated by Parliament annually to neighbourhood democratic councils shall be allocated to the neighbourhood democratic councils in accordance with their population size, geographic area and rate of collection in accordance with the Schedule.
10. The Minister may make regulations, subject to affirmative resolution of the National Assembly, for the more effective implementation of the provisions of this Act.
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SCHEDULE cls. 6(5), 6(7), 8 and 9
(1) The Following shall apply for the purpose of determining how the annual appropriations, in the National Budget, for the local authorities (the Neighbourhood Democratic Councils and the Municipalities, except Georgetown) shall be distributed among those neighbourhood and municipal councils, respectively.
or
(2) The following shall be the bases for the distribution of the appropriation of the annual budgetary provisions for the local authorities (Neighbourhood Democratic Councils; and Municipalities except Georgetown among the aforementioned councils, respectively).
1. The total appropriation for each category of local authorities: neighbourhoods and municipalities except Georgetown, shall be distributed thus:
(a) 50% of each appropriation shall be equally divided among the local authorities of the respective category;
(b) the remaining 50% of each appropriation shall be divided among the local authorities within the respective categories by applying the following formula to each category.
(i) The formula shall comprise three factors:
- area of the local authority, hereafter referred to as A
- population of the local authority area, hereafter referred to as B - percentage collection of revenue for the preceding year, for the local authority,
hereafter referred to as C
(ii) Each factor shall be indexed thus
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A
area >/=25 sq mls (1.0)
area /=10 sq mls (0.8) indexed as
area < 10 sq mls >/= 5 sq mls (0.65) x
area < 5 sq mls (0.5)
B
population >/= 25,000 (1.0)
population < 25,000 >/=10,000 (0.8) indexed as
population < 10,000 >/=7,000 (0.65) y
population < 7,000 (0.5)
C
collection >/= 70% (1.0)
collection < 70%/= 50% (0.8) indexed as
collection

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