The United Nations Joint Programme on Local Governance and Decentralized Service Delivery (JPLG) in Somalia involves UN-Habitat and four other UN agencies. The first phase of JPLG began in 2008 and ended in 2012. JPLG II (2013–2017) is now being completed in Somaliland and the Puntland State of Somalia, with plans to expand to newly emerging Somali states (e.g. Juba). Broadly, JPLG works towards the transparent, accountable, and efficient provision of local services. Within the programme, UN-Habitat is responsible for:

(1) Municipal finance

(2) Participatory urban land management and planning

(3) Land governance (e.g. the land dispute tribunal mechanism)

(4) Solid and bio-medical waste management

(5) Building the capacity of local governments

Somaliland and the Puntland have adopted local government finance policies that provide a framework for decentralization via devolution and de-concentration of financial functions to local governments. The policies provide guidance on key municipal functions such as revenue generation, expenditure management, budget preparation and execution, capital procurement processes, strengthening of internal control mechanisms, asset management, debt and credit management, and monitoring and evaluation mechanisms.

With the start of JPLG in 2008, UN-Habitat introduced the Accounting Information Management System (AIMS) and the Billing Information Management System (BIMS) in order to improve the transparency, accountability, and efficiency of local governments in Somaliland and Puntland. AIMS and BIMS have been used in local governments’ daily operation for all financial transactions, reporting, and improving tax collection, particularly with regard to property.

In order to accommodate the local governments’ growing demand for information management systems such as AIMS and BIMS, UN-Habitat has partnered with the World Bank in the design and implementation of an integrated financial information management system. The infrastructure for the system has been put in place in Somaliland, while Puntland remains in the procurement stage.

Together with local government authorities, UN-Habitat has established a geographic information system (GIS) property database where data on the location of properties and urban parcels are surveyed, catalogued, and regularly updated. This database includes information on the quality of the properties, land use, infrastructure, ownership, and number of occupants in order to define the tax rate for each property and notify occupants of their tax obligation to the municipality. This data is then connected to the local government finance system to generate bills and to account for tax collection.

The implementation of the system led to revenue (particularly property tax revenue) skyrocketing in the majority of participating municipalities, as depicted in the graphs. For example, data extracted from Hargeisa Municipality’s AIMS system shows that property tax collection rose from approximately USD 250,000 in 2008 to over USD 1 million in 2015, an average annual increase of 38 percent, equivalent to almost 300 percent in eight years. Similarly, Berbera Municipality managed to collect USD 500,000 last year from property taxation.

Figure 1: Municipal revenue from property taxation in JPLG-supported districts in Somaliland 2008–2015

Source: Data from Districts’ Accounting Information Management System (AIMS)

Figure 2: Municipal revenue from property taxation in JPLG-supported districts in Puntland 2008–2015

Source: Data from Districts’ Accounting Information Management System (AIMS)

This significant increase in property tax revenue is largely due to the introduction of JPLG programme reforms, which UN-Habitat has supported with continuous technical assistance and capacity development for local staff. Municipalities also started using the system to levy other taxes that local governments are allowed.

However, there is still room for improvement, especially in the areas of collection and enforcement. A forthcoming study by UN-Habitat will provide recommendations for enforcement mechanisms and by-laws, which will provide a framework for administering property taxes, assessing property values, and improving collection, enforcement, and accountability.