Investor Presentaiton

D.1.1 Benchmark: Mali created a partnership model with informal traders by delegating management of taxes to official trader organizations Mali Context Poor revenue collection and high levels of tax avoidance in informal markets Tax collection in Bamako was responsibility of local government Traders didn't trust the government and preferred avoiding tax Informal market represents a big tax base given how large this market is in Bamako What did Bamako do? Local Municipality delegated management of tax & markets at informal markets in Bamako • • Selected 5 markets with more than 1000 traders for the delegation project Grouped the traders within each market into official trader associations - Mainly formalized the already existing structures, since traders naturally form unofficial groups to protect their rights Created an umbrella organization to group all market associations and provide them with technical training Conducted a census on the number of potential taxpayers in these markets, and used the numbers as a starting point for negotiations Signed a management agreement with each association, which makes the associations responsible for tax collection, maintenance, and policing of their respective markets Agreed to invest part of the tax collection back into the markets Source: Ledna; BCG Analysis Key successes Led to increased tax collection Municipality has improved tax collection by ~100% Due to a very targeted collection approach Voluntary approach given traders knew government will reinvest some of the taxes to developing their markets Resulted in further development of municipality Improved working environment of the markets A portion of taxes are used for maintenance needs of markets e.g: water & sanitation Investments in commercial facilities Learnings for Plateau State Conduct research to focus on the correct target markets E.g.: survey to establish which informal markets have big tax potential Target these markets instead of targeting all at once Establish win-win partnerships between informal trader associations & local authorities to increase tax collection & help increase productivity A cooperative approach helps to build trust Establish official trader associations Develop contracts between tax collecting 'trader associations' and local authority with clear list of responsibilities incl. tax collection Government can get buy in by re-investing some tax collected back into market by providing training to improve productivity Copyright 2019 by Boston Consulting Group. All rights reserved.

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