Exploring behavioral change interventions, whether digital or physical, to encourage market traders to make timely tax payments.

A smart city pilot project aiming to align resource management to leverage the benefits of urbanization and aid municipalities is underway in Banjul, the capital city of The Gambia. In collaboration with the Banjul City Council (BCC), the UNDP The Gambia Accelerator Lab (AccLabGM) with support from the UNDP Global Centre for Technology, Innovation & Sustainable Development in Singapore, is supporting the BCC (GBA) to update and modernize their tax collection systems through behavioral change interventions and digital solutions.

In the Gambia, local governments are responsible for provision of basic services and infrastructures such as markets, roads, parks, and other amenities needed by people in their communities. Hence, the ability of local governments to adequately provide these services is crucial for the realization of the SDGs. Equally, enhancing the capacity of local governments in mobilizing resources and executeing their mandate more effectively is of paramount importance. Evidence has shown that technology can help countries to effectively and efficiently mobilize domestic resources as well as reduce leakages in their spending.

To kick-start the pilot, AccLabGM reached out to all three municipalities within the GBA to understand their  operations and specifically, their tax collection methods with the objective to better understand their challenges and the areas where digitalization can  improve the efficiency of their revenue collection systems. This sense-making process highlighted differences in level of information that each municipality had of their taxpayers and of their digital preparedness and capability. One common challenge that emerged is the inadequate payment of taxes and ability to accessing all tax revenue from taxpayers. With the advantage of its size and having a complete database of all households, vendors and traders within their jurisdiction, the Banjul City Council (BCC) was identified as the host municipality for the project pilot.  Their main challenge to revenue loss was that their collection data not tallying  up to their tax base with bottlenecks in enforcement of measures to ensure timely payments from households and businesses.

The first step was to develop a user journey map together with BCC to gain better understanding of the tax collection process. Secondly AccLabGM together with the digital technologies team in Singapore developed a survey to collect insights of the BBC market vendors and traders perspective. The data we sought to capture explored:

• What are the characteristics of the vendors, their experience with renting a store and registering a business within BCC.
• Is the tax payment process easy / difficult and why? This would help identify the pain points but also what is working and why, which can bring insights that will be useful to develop the solution and clues on how to reinforce the positive elements of the process.
• Does the process from the user’s perspective aligned with what is identified by the municipality and are their new contact points that are important?
• What is the level of digital literacy of a ‘typical’ user in order to develop a sustainable solution? 
• What are the recommendations from users on how BCC could improve the payment process and their proposed solutions?

The respondents’ group comprised 1801 market vendors surveyed over a one week period. To better understand the information collected, an analysis would have to be carried out to draw out trends and patterns from the. AccLabGM used this as an opportunity to add another partner to the project by reaching out to the University of The Gambia to support with the task and add another dimension to our assessment. This phase explored the following questions as we prepare to explore a practical digital solutions that can be tested within the BCC. Viable options could take on many forms including a mobile money system or SMS short code system.  

1. How satisfied or not are the users with each different moment of the workflow (identifying a store, paying, changing store, etc.)? Do these perceptions change according to different profiles of respondents (age, education, language, type of vendor (daily, weekly, monthly) etc.)?
2. What are the main elements respondents complain about at each stage and what are the main suggestions for improvement? Do these perceptions and proposals change according to different profiles (age, education, language, type of vendor (daily, weekly, monthly) etc.)
3. Regarding the payments/registration process, is there strong support for a digital solution? How does this support compare with support for an SMS solution, or with the non-digital solutions suggested by respondents (and what alternative approaches are suggested)?
4. What are the characteristics of respondents supporting digital or non-digital solutions (age, education language, type of vendor (daily, weekly, monthly) etc.)? Are these characteristics different for those using, or not using, mobile money (and what barriers do respondents face in acquiring a mobile money account)?

At a time when the Gambia’s ICT penetration rates are currently 97 % for mobile phones, and 18.5 % for internet, the pilot has the potential to be scaled up and offer a solution of integrating urban governance and technology for sustainable national development. The role of ICT and digitization for social and economic development is key to creating jobs (SDG 8), factoring innovation (SDG 9), efficiently delivering services to the people and solving local development challenges.

We want to hear your thoughts and recommended solutions to increase the fiscal space of municipalities. Are you working on making your city smarter and if so how? Tag us in your work using #AccLabGM.