New Challenges for Local Government Revenue Enhancement

"The recent rationalisation of local government taxes and, in particular, the abolishment of the development levy, imply that many district councils, in the short run, will lose 40-50 percent of their own generated revenues. This has raised concern among stakeholders at both the local and central levels that the financial autonomy of local authorities is undermined and that some councils are moving towards bankruptcy. In this Project Brief, Odd-Helge Fjeldstad argues that there are reasons to be concerned about the short-term impacts of the tax rationalisation. However, the reform also represents an opportunity for local governments to implement much needed reforms of their revenue systems and to look at new approaches for revenue enhancement and cost saving."