Thursday, March 27, 2014

Non-Tax Fund Generation for Governments

Governments have been focussing on Tax as a primary source of fund generation. Because of the nature of taxation, there are severe issues in the two primary kind of taxes – the direct taxes and the indirect taxes. There has been many discussions on how indirect taxation distorts the economy and how direct taxation is discriminatory in nature as many are outside the purview of direct taxes.

However, as we move into an era of ever expanding demands on the government to deliver, the pressures for fund generation has been spiralling up. This has been accentuated by voters’ comparisons between the private sector’s ability to deliver personalized services to a large number of people versus the Government’s inability to do the same.

An interesting outcome of such a dynamics is the ability to transform the government from a primarily Tax Oriented Government (TOG) to a Service Oriented Government (SOA), and in the process, unlock very significant economic values that are trapped in various kinds of physical and non-physical assets that are owned by the government.

This is the journey towards the Next Generation Government (NGG).

Next Generation Governance is an evolutionary step towards a more efficient, inclusive and participative government through adoption of a set of new trends in business models, operational models, financial models and technological models for achieving Outcome based Governance

Economic value is trapped in assets such as spaces, impact zones, monopolistic data and ability to create wealth by marrying appropriate policy with capital, in a manner that private sector is not in a position to do. Unlocking the economic values through a combination of appropriate policies and development of a Service Oriented Administration will unlock the economic values of these Government owned assets, leading to creation of very significant non-Tax revenues.

A significant percentage of the GDP of an economy can be expanded by the unlocking of such tangible and non-tangible economic assets

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