FORECASTING AND PLANNING METHODS FOR LOCAL TAXES

Abstract

In the contemporary landscape of fiscal decentralization, local governments are increasingly entrusted with responsibilities that directly impact citizens’ daily lives—ranging from education, healthcare, and infrastructure to public safety and environmental protection. To fulfill these responsibilities effectively, local authorities require stable, predictable, and sufficient revenue streams. Among the most critical sources of this revenue are local taxes, which include property taxes, land use fees, business licenses, and other levies designed and administered at the subnational level. However, in many regions—especially in developing and transitioning economies—local tax systems face significant challenges in terms of efficiency, transparency, and predictability. These issues are often rooted in weak institutional capacity, outdated forecasting tools, poor inter-agency coordination, and limited access to timely and accurate data.