Part 1: General. Existing Revenue Sources of the Municipal Council. List of Revenue Sources. Name of Legislation

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1 Part 1: General 1' all existing revenue sources of Municipal Council Existing Revenue Sources of the Municipal Council Table 1 indicates all existing revenue sources of the Municipal Council together with applicable legislation. Municipal Councils can generate revenues under each of the 25 sources given hereunder. Table 1 - All existing revenue sources of MC Name of Legislation Under Municipal Council Ordinance Applicable Section Section 163 Section No 185 (2) Schedule Number 02 (a) Section 185(2) (d) Section Section (185) (2) (d) (e) Section (185) (2) (f)(g) Section (185) (2) (f) (g) Section 230 Section 245 to 246 List of Revenue Sources Source of Revenue 1. Court Fines 2. Stamp Duties 3. All other charges levied by the Council 4. Sales 5. Lease of Shops 6. Lease of Lands 7. House and Official Quarters Rents 8. Interest 9. Daily/Weekly Fair 10. Rents derived from letting Play Grounds/Town Hall/Community Halls 11. Public Service Charges 12. Grants allocated by decentralized budgets 13. Grants allocated by Line Ministry 14. Provincial Council Criteria Based Grants 15. Criteria Based Grants 16. Staff Salary reimbursements 17. Members fee reimbursements 18. Rates 19. Taxes levied on vehicles and animals

2 Name of Legislation Section 185 (b) Section 247 (b) (d) Section 247 (c ) Section 247 (d) Section 247 (e) Section 255 Under other main legislations Entertainment Tax Ordinance The Butchers Ordinance Licensing of Clubs Act No 17 of 1975 National Environment Act no 47 of 1980 By-Laws enacted by the council Section 2 Section 11 Section 4 Orders imposed by the Minister under section 3 Applicable By-Law to be read with section number 247(a) of the MC Ordinance List of Revenue Sources 20. Taxes levied on Business Premises (Trade Tax on based on Annual Value of the premises Schedule No 1) 21. Taxes levied on Business Turnover (Business Tax Schedule No 11) 22. Taxes levied on Bare Lands 23. Taxes levied on Sale of some land plots 24. Recovery of costs on any warrants issued. 25. Charges on seizure and removal of goods seized. 26. Charges on keeping any goods seized in safe custody. 27. When any sales take place of seized movable properties 1% of the sale value of the movable properties. 28. Entertainment Tax 29. Charges levied to inspect slaughtered Animals 30. Licence fee 31. Environmental Licence fees 32. Issue of Trade Licences Schedule No Issue of Butchers Licence 34. Public Slaughter House Exposure of flesh of Animals 35. Public Slaughter House- Emergency Permits to transport animals -

3 Name of Legislation List of Revenue Sources 36. Public Slaughter House- Transportation of Meats Mapping of Current Procedures and Practices Revenue Source 01 Court Fines a. A Municipal Magistrate shall hear, try, and determine any offences committed within the Municipality under this Ordinance or under any by-laws, rules or regulations made there under, and also any offences under any of the enactments specified under section 163 of the Municipal Ordinance. All money recovered as Court Fines should be remitted to the Municipal Fund, and to be utilized as per the directions given under section 188 of the. s Section 163 Section 185 (b) i. Assessment and recovery of Court Fines remitted to the Provincial Commissioner of Revenue on behalf of the MC i. Identify the Municipal Magistrate appointed by the Judiciary Service Commission for the MC Jurisdiction. ii. Council to obtain a schedule of the Court Fines imposed on offences committed on monthly basis from the courts, within the jurisdiction under section 163

4 iii. Council to prepare a schedule of fines receivable. iv. Council to submit the schedule to the provincial commissioner of revenue for reimbursement. v. Council to maintain a register for Court Fines to reconcile the amount receivable/received from the Provincial Commissioner of Revenue. Revenue Source 02 Stamp Duty a. Municipal Council can recover all Stamp Duties accorded to the Council as per the Second Schedule of the. All such revenue should be remitted to the Municipal Fund and to be utilized as per the directions given under section 188 of the. s Section 185 (2) (c) Second Schedule

5 i. Identify the offices of the Land Registrar assigned to register the property deeds for the council area. i. Identify the additional district registrar s office within the jurisdiction of the council. ii. Identify the District registrar s office for the jurisdiction of the council Deeds could be registered in any one of these offices within the jurisdiction of the council. ii. iii. Identify the lands registered in these offices Request for the stamp duty receivable by the council. i. Visit the above offices at least once in two weeks and inspect the registration schedules. ii. Identify the lands registered within the jurisdiction of the council iii. Record the information and the stamp duties applicable to each property register i. Prepare a schedule of stamp duty receivable by the council. ii. Obtain a confirmation from the registrar of lands iii. Submit the schedule confirmed by the registrar of lands to the Provincial Commissioner of Revenue for reimbursement.

6 Revenue Source 03 All other Charges Levied by the Council a. Municipal Council can recover all Stamps other Charges accorded to the Council as per the Second Schedule of the. All such revenue should be remitted to the Municipal Fund and to be utilized as per the directions given under section 188 of the. s Section 185 (2) (d) Second Schedule (3) and (4) Procedures and Practices i. Assessment of revenues receivable i. Obtain a list of names of the lawyers practicing the profession within the jurisdiction of the council and the information on the stamp duties paid during the year on annual basis (at the end of each year) from the registrar of the courts as per section 40 of Judicature Act. ii. Obtain the list of license holders under the Notaries Ordinance practice within the jurisdiction of the council from the Sectary, Ministry of Home Affairs.

7 Request for stamp duties receivable under other Acts and Ordinances. iii. Obtain a names of the auditors registered within the jurisdiction from the Provincial registrar of Companies. i. As per above information prepare a list of stamp duties receivable from each institution ii. Forward the schedule to the assistant secretary of the treasury for reimbursement Revenue Source 04 Sales a. Municipal Council can generate additional revenue by sale or lease of items belonging to the council E.g.; Discarded items, old newspapers, produce from home gardens, compost produced by the council, sale of recycle items collected by the council etc. s Section 185 (2) (d) i. Identification of items to be sold by the council i. Conduct an annual survey to identify the items that are usable, discarded and written off. ii. Submit the schedule of items to the Board of Sale for initial authorization

8 ii. Sale of items iii. Appoint a suitable person to carry out the valuation iv. Obtain the council approval. v. Decide the mode to advertise the sale E.g.- Newspaper advertisement, handbills, notice board etc. vi. Set the lowest bid and sell the items by tenders/auctions any other method approved by the council. Revenue Source 05 Lease of Shops a. Municipal Council can generate additional revenue by lease of shops belonging to the council Section 185 (2) (d) i. Calling for Tenders at the initial leasing of shops i. Allocation of Shops for trading purposes. ii. Prepare Tender Notice and Draft copy of Agreement iii. Obtain Council Approval for Tender notice and Draft Agreement

9 iv. Publish Tender Notice v. Award the Tender vi. Obtain a by way of cash or Bank draft vii. Sign the agreement viii. Hand over the Keys to the tenants ii. Collection of Rents i. Collect Rents on Monthly basis. iii Extending the agreement at a latter period of time iv Charge rent according to the new agreement ii. iii. When the rent is in default add a 10% surcharge If the rent is in arrears for more than 4 months take steps to acquire movable property i. Carry out a rent assessment two months in advance before the date of expiry of the current rent agreement ii. iii. iv. Revise rent according to the new assessment in the new agreement Obtain a 6 months rent (revised) as a deposit by way of cash or Bank draft Charge rent in arrears (if there are any) v. Revenue the agreement at the end of the period i. As per number 2 above from the day the new agreement is come into effect.

10 V Approval of ownership to operate the Shop as per agreement. i. Confirm the identity of the shop owner once a month ii. iii. iv. If the shop is sub-let notify the owner the cancellation of agreement If the tenant does not adhered to the notice take steps to seal the shop Follow steps as per initial renting of shops when the acquired shops are rented to new tenants. This investigation will be a duty of Revenue Inspector/Revenue supervisor or if there is any officer in charge of managing the shops a. Sources of Income 5 - Renting Market Stalls on Long Term Lease. Municipal Council can generate revenue by constructing Public Market Buildings and renting market stalls on monthly rental basis. This additional revenue is to be utilized to provide public utility services for citizens. s Municipal Councils can generate revenue by renting Market Stalls under section 40(1) (u) (iv) of the Ordinance. When the market stalls are given on rents the council should enter into an agreement under Common Law to charge rentals on monthly basis. 1. Calling for Tenders at the initial leasing of shops, i' Allocation of Shops for trading purposes. ii' Prepare Tender Notice and Draft copy of Agreement

11 iii' Obtain Council Approval for Tender notice and Draft Agreement iv' Publish Tender Notice v' vi' Award the Tender Obtain a 6 months rent as a deposit by way of cash or Bank draft vii' Sign the agreement viii' Hand over the Keys to the tenants 2. Collection of Rents i' Collect Rents on Monthly basis. 3. Extending the agreement at a latter period of time ii' When the rent is in default add a 10% surcharge iii' If the rent is in arrears for more than 4 months take steps to acquire movable property i' Carry out a rent assessment two months in advance before the date of expiry of the current rent agreement ii' Revise rent according to the new assessment in the new agreement iii' Obtain a 6 months rent (revised) as a

12 4. Charge rent according to the new agreement 5. Approval of ownership to operate the Shop as per agreement. deposit by way of cash or Bank draft iv' Charge rent in arrears (if there are any) v' Revenue the agreement at the end of the period i' As per number 2 above from the day the new agreement is come into effect. i' Confirm the identity of the shop owner once a month ii' If the shop is sublet notify the owner the cancellation of agreement iii' If the tenant does not adhered to the notice take steps to seal the shop iv' Follow steps as per initial renting of shops when the acquired shops are rented to new tenants. This investigation will be a duty of Revenue Inspector/Revenue supervisor or if there is any officer in charge of managing the shops Source of Income - Renting Market Stalls (Meat Stalls) on Annual Basis (By Tenders) a. The Council can generate revenue by constructing Meat Stalls and renting these stalls on monthly rental basis. This additional revenue is to be utilized to provide public utility services for citizens.

13 b. Legal Requirement Municipal Councils can generate revenue on the above basis under section 40(1) (u) of the Ordinance. When the market stalls are given on rents the council should enter into an agreement under Common Law to charge rentals on monthly basis. 1' Call for Tenders i' Decide the lowest bid. ii' Draft the agreement and Tender notice iii' Obtain council approval for agreement and tender notice iv' Call for Tenders v' Evaluate the Tenders vi' Obtain Council Approval vii' Award the Tender viii' Obtain a 6 months rent as a deposit by way of cash or Bank draft vii' Sign the agreement viii' Hand over the Keys to the tenants 2' Collection of Rents i' Collect Rents on Monthly basis. ii' If the rent is in arrears take steps to acquire movable property or seal the shops Revenue Source 06 Lease of Lands a. Municipal Council can generate additional revenue by lease of lands belonging to the council. This additional revenue should be deposited in the Municipal Fund account and utilize for the purposes prescribed as per section number 188 of the.

14 Section 185 (2) (d) 1. Calling for Tenders at the initial leasing of shops i. Allocation of lands available in the council area that could be given on lease ii. Prepare Tender Notice and Draft copy of Agreement iii. Obtain Council Approval for Tender notice and Draft Agreement iv. Publish Tender Notice v. Award the Tender vi. Obtain a by way of cash or Bank draft vii. Sign the agreement and hand over the tenancy. 2. Collection of Rents i. Collect Rents on Monthly basis. ii. When the rent is in default add a 10% surcharge iii. If the rent is in arrears for more than 4 months take steps to acquire movable property 3. Extending the agreement at a latter period of time i. Carry out a rent assessment two months in advance before the date of expiry of the current rent agreement

15 4. Charge rent according to the new agreement 5. Approval of ownership to operate the Shop as per agreement. ii. Revise rent according to the new assessment in the new agreement iii. Obtain a 6 months rent (revised) as a deposit by way of cash or Bank draft iv. Charge rent in arrears (if there are any) v. Revenue the agreement at the end of the period i. As per number 2 above from the day the new agreement is come into effect. i. Confirm the identity of the shop owner once a month ii. If the shop is sub-let notify the owner the cancellation of agreement iii. If the tenant does not adhered to the notice take steps to seal the shop iv. Follow steps as per initial renting of shops when the acquired shops are rented to new tenants. This investigation will be a duty of Revenue Inspector/Revenue supervisor or if there is any officer in charge of managing the shops Revenue Source 07 Houses and Official Quarters Rents a. Municipal Council can generate revenue by renting the houses and official quarters belonging to the council. Revenue generated through rents should be deposited in the

16 Municipal Fund Account and utilize in accordance with section 188 of the MC Ordinance. Section 185 (2) (d) 1. Identify the officers who are entitle to official quarters 2. Handing over of the official quarters and charging the monthly rentals. i. Prepare a internal policy applicable for official quarters ii. Inform the occupant that the council is ready to handover the official quarters as per the council policy. i. Enter into a rent agreement before tenancy ii. Handover the quarters to the occupant iii. Charge rents from the monthly salary of the officer. Revenue Source 08 Interest a. Municipal Councils can invest funds in Banks or Other Financial Institutions and generate interest on such investments. These interests could be collected on quarterly or on annual basis. Revenue generated through interest should be deposited in the Municipal Fund Account and utilize as per the directions given under section 188 of. Section 185 (2) (d)

17 No specific procedure or practice, but will be based on the standard accounting principles and practices. Revenue Source 09 Daily/Weekly Fair a. Municipal Councils may from time to time, as occasions requires, provide places within the Municipality for the purpose of being used as public markets, and may charge such rents, tolls and fees as to it may seen fit for use of, or the right to expose goods for sale in, such markets and for the use of shops stalls sheds, pens, and standing therein. Revenue generated through interest should be deposited in the Municipal Fund Account and utilize as per the directions given under the section 188 of the. Section 185 (2) (d) 1. Council to decide the method of collecting the revenue from the daily/weekly fair i. Council to decide the policy of charging the rents i.e. through the council officers, or tender and collecting the lease rents ii. Decide the rents charged for shops, stalls, pens and standing therein. If the council revenue officers are collecting rents assign them on daily basis to collect the rents. 2. If tender system is used call for tenders i. Decide the minimum bid. Revenue Source 10 Rents derived from letting Play Grounds/Town Hall/Community Halls

18 a. Municipal Councils may from time to time, as occasions require can hire play grounds, town halls and community halls for temporary occupancy. Revenue generated through these processes should be deposited in the Municipal Fund Account and utilize as per the directions given under the section 188 of the. Section 185 (2) (d) 1. Decide the rents charged. i. Calculate the rents based on usage of water, electricity and cleaning and maintenance of the premises that will be hired on temporary basis. ii. Calculate the charges on extra hours for water and electricity. Consider the overtime payable to workers for the additional hours. iii. Add extra 5% to the base rate calculated on the above and decide on the rents chargeable from the occupants iv. Calculate the extra hourly charges and add another 5% to the base rate for the extra hour charges. v. Make a council decision on the rents

19 charged based on the above calculations. 2. Premises given on rent i. Identify an officer in charge of allocating the premises. ii. When the premises are allocated charge the rents accordingly Revenue Source 11 Public Service Charges a. Municipal Council can generate additional revenue by providing services on a fee basis to the public. These fees are collected for the services provided at personal levels by the Council. The fees charged for services such a s clearing of blocked drains and drainage, removal of branches and other parts of trees cut down on the roads by persons, providing services of crematoriums, hiring of heavy equipment owned by the council are some of the examples. Revenue received from such services should be deposited in the Municipal Fund and utilize according to section 188 of the. Section 185 (2) (d) 1. Identify the services provided by the council i. Identify the machinery/gully bowsers/crematoriums that are owned by the council and the other series provided. ii. Calculate the rates based on the system provided in section 10 above 2. Service Delivery i. Charge for the services as per section 10 above Revenue Source 12, 13, 14, & 15 Clearing of blocked drains and drainages, removal of brancyes and other parts of trees cutdown on the roads by persons providing services of crematoriums, hiring of heavy equipment owned by councils etc

20 Grants allocated by decentralized budgets Grants allocated by Line Ministry Provincial Council Criteria Based Grants Criteria Based Grants a. These funds are received from external sources by the council from time to time for development activities and improvement of service delivery of the council. Therefore the council cannot assess or decide in advance the revenue receivable under these sources. Section 185 (2) (g) cannot be decided as per the above. Revenue Source 16 & 17 Staff Salary reimbursements Members fee reimbursements a. Municipal Councils receive grants from the Provincial Ministry of Local Government for reimbursement of salaries and members allowances. The percentage of reimbursement (100% or lesser percentage) and the conditions applicable for reimbursement is decided by the Provincial Minister from time to time and directions will be given to the Provincial Commissioners of Local Government to act accordingly. Section 185 (2) (d) 1. Prepare the annual Budgets and estimates i. Identify the cadre and the Salary payable together with the proposed increments for the budgeted year. ii. Calculate the amount payable to the elected representatives for the budgeted year

21 2. Submit the statements for reimbursement i. Calculate the actual payments on monthly basis ii. Submit the statement to the Provincial Commissioner of Local Govt for reimbursement Revenue Source 18 - Assessment Rates a. A certain percentage of the annual value of the lands and buildings situated within the area of Local Authority is collected as Assessment Rates. This revenue is utilized to maintain common services delivered to the citizens. The councils may impose a higher rate on premises used for business or commercial purposes. Council may with the sanction of the Minister, impose different rates for different areas or parts of the Municipality according to the services provided by Council for each such area or part. The council is compelled to provide services even to the unauthorised constructions and these costs are not being reimbursed by such service recipients as they do not pay assessment rates. These costs are therefore recovered from the other rate payers. Due to this reason it can be concluded that there is no uniformity in charging taxes by the councils and this situation is unavoidable. As per the powers given under section 230 subsection (1) the Municipal from time to time so often as it thinks necessary, make and assess, with the sanction of the Minister, any rate or rates on the annual value of all houses and buildings of every description and of all lands and tenements whatsoever within the Municipality. Please refer sections of the Municipality Ordinance The powers to recover the rates and taxes are given under clauses 252 to 264 (a). It shall be the duty of the Commissioner to issue a warrant signed by him to recover rates and taxes. The Assessment rates should be charged annually and council approval should be obtained prior to charging the annual rates. When the assessment rates are imposed it is necessary to accept the preceding year assessment to impose the succeeding year assessment. b. Legal Requirement

22 Section 230 1' Assessment of Property Tax 2' Annual Assessment Taxes 3' Collection of Assessment Taxes i' Council decision ii' Minister s approval iii' Assess property iv' Obtain council approval for new assessments v' Decide the new percentage of increase based on the new assessment and expenditure vi' Issue assessment notices vii' Call for objections viii' Review the objections i' Council decisions ii' Gazette notification iii' Issue assessment notices iv' Call for objections v' Review the objections i' Payment at the Cashier s desk in the Council ii' Through revenue inspector/revenue supervisor iii' Issue of Warrant of Distress against defaulters iv' Acquiring property v' Sale of Acquired property vi' Acquire immovable property vii' Sale or transfer ownership of acquired property

23 4' Revision of Assessment Tax based on physical changes done to the property. 5' Certificate of Conformity (CoC) for new constructions i' Annual verification ii' Revise assessment taxes based on physical changes done to the property iii' Issue assessment notices iv' Call for objections v' Review the objections i' Forward the CoC to Assessment Tax division. ii' Revise the annual value of the new property iii' Issue assessment notices iv' Call for objections v' Review the objections 6' Removal of unauthorized constructions or grant approval i' Identify unauthorized constructions in the area 7' Increase in annual value of property due to accelerated development in an area. Follow step 4 Revenue Source 19 - Taxes levied on vehicles and animals a. As per section in the Municipal Council Ordinance, annual taxes on vehicles other than Motor Coaches are collected by the Council. Carts- hand carts and bicycles and animals such as elephants, horses and dogs are also included in this class. In addition to the receipt, a licence plate is also issued on payment and this plate should be fixed or hung on the vehicle or animal s neck. The Council has the power to take into taken into custody the animals and release them after recovering the tax and the cost of taking them into custody for non payment of tax. If the relevant taxes and costs are not paid when the dogs are taken into custody, Council also has the power to destroy such animals.

24 Section 185 (2) (a) and (b) Section 245 to246 Assessment of vehicles (excluding motor vehicles) and animals that are subject to tax within the council area Carryout an annual survey to assess the vehicles and animals that are subject to tax Imposing the tax Prepare a resoulution for the council Collection of tax Submit the resolution to the standing committee for finance in the council Submit the resolution together with the finance committee report for council approval Publish the Gazette notice Issue the gazette notice to the relevant officers in the council Forward the tax notices to the relevant payers Collect taxes Revenue Source 20 - Taxes levied on Business Premises (Trade Tax based on annual value of the premises a. Local Authorities have the power to collect an annual tax from industries, trades and businesses premises within their areas of authority. Such taxes may be collected for the purposes stated in the by-laws framed under the provisions in the Act and subject to

25 limits stipulated in those by-laws. This tax is charged on the annual value of such premises falls within the limits of any item stipulated in Column I and II in section 247 (A) of the Ordinance. Section 247A Section 185 (2) (a) 1' Assessment of Tax levied on annual value of Business Premises i. Carry out a survey to identify the business premises within the council area ii. Determine the annual value of the business premises. 2' Collection of Tax i' Forward Tax notices calculated based on the directions provided in Section 247 A Column I and II ii' Identify defaulters iii' Seek Legal Action against defaulters Tax based on the annual value of the business premises. Maximum Tax levied is LKR 5000/- refer schedule 1 for list of trades that are subject to trade tax Revenue Source 21- Business Tax a. Municipal Council has the power to collect an annual tax from businesses, other than industries which needs to obtain licence under section 247(a) or industries subject to tax under section number 247(b) Professional services and other service providers are categorised under this section. Nevertheless as per the Municipal Council Ordinance section number 247 (c) subsections (1a), there is no maximum sealing of the tax to be charged from the

26 Professionals is imposed by the Minister therefore this tax cannot be recovered from the professionals. Other than professional services all other businesses are subject to this tax. The tax rate for such businesses can be levied based on the past turnover. As per clause number 247 (c ) the business tax levied should not exceed the annual value of the premises on which that the trade is carried on; and the tax should fall within the limits set out in Column 11 of the section 247 (c ). The tax should be imposed annually and the last date of payment will be decided by the council. b. Section 247 (a) and (b) Section 185 (2) (a) 1' Assessment of Business Tax 2' Collection of Business Tax i' Carry out a survey ii' Draft the proposal iii' Obtain Council Approval iv' Issue Gazette Notice i' Forward Tax notices ii' Identify defaulters iii' Seek Legal Action against defaulters Maximum Tax chargable is LKR 3000 Refer schedule 11 for list of businesses that are subject to business tax Revenue Source 22 - Tax on Undeveloped Land a. Tax on undeveloped Land is identified as a compulsory tax that should be imposed by the council. This is the only self generated revenue source of the council that has been identified as compulsorily imposed. Such properties will not contribute positively to the local economy. The council has born the costs of providing services for undeveloped lands too and these costs will otherwise be borne by the rate payers.

27 Therefore to minimize the loss to the council tax it is compulsory to impose taxes on undeveloped lands. To identify the annual rate to be charged on undeveloped land the council will decide the proportion of land that the extent of such land which is actually covered by buildings bears to the total extent of such land, a proportion less than that prescribed by the council resolution. b. Legal Requirements Section 247(b) 1' Assessment of tax on undeveloped land i' Carry out a survey ii' Draft the proposal iii' Obtain Council Approval iv' Issue Gazette Notice 2' Collection of tax i' Forward Tax notices ii' Identify defaulters iii' Seek legal against defaulters to recover the arrears. Maximum 2% tax could be levied on annual value of bare lands Revenue Source 23 - Taxes levied on Sale of some land plots a. Local Authorities have the power to collect taxes on any land within the administrative limits of the sold by public auction or otherwise, by an auctioneer or brokers or his servant or agent, the vendor or such auctioneer or broker or his servant or agent shall pay to the Council, from the proceeds of the sale of such land a tax equivalent to 1% of the amount of such proceeds. Section 247 (e)

28 1. Identify the lands sold by auctioneers or brokers 2. Charge tax on land sold by the auctioneer or broker. i. Identify the auctioneers or brokers through the advertisements published to sell the lands within the jurisdiction of the council. ii. Identify the auctioneer or broker through the applications submitted to the council to erect notice boards, banners and other advertising materials. iii. Identify the auctioneer or broker through the applications received by the council for division of land into several blocks. (Land plots) i. Obtain information about the land sold by auctioneer or broker along with the other information obtained regarding the stamp fees ii. Forward a tax notice for 1% of the value of the land sold from the auctioneer or Maximum tax 1% of the sale proceeds.

29 iii. broker. Inform the magistrate about defaluters., Revenue Source 24 - Recovery of costs on any warrants issued. a. Local Authorities are entitled to recover the costs incurred in relation to the warrants issued by the councils to collect the arrears of assessment rates. This fee should not exceed the 10% of the value of the rates payable or 15% on the amount of rate due on bare lands or 20% on the amount of rate due on properties other than bare lands and residential premises. Section 255 (a) Councils can recover this revenue from defaulters of assessment taxes. The Municipal Commissioner/UC Secretary has to issue the Warrant and based on the amounts in arrears the revenue will be calculated. Revenue Source 25 - Charges on seizure and removal of goods seized. a. Local Authority can recover the costs incurred for seizure and removal of goods seized, in case such removal takes place, a charge not exceeding five cents for every fifty cents of rate or tax or rent due Section 255 (b) Revenue Source 26 - Charges on keeping any goods seized in safe custody. a. Local Authority can recover costs incurred for keeping any goods seized in safe custody in case of detention, a charge not exceeding Rs.75/- per day

30 Section 255 (c) Revenue Source 27 - When any sales take place of seized movable properties 1% of the sale value of the movable properties. a. Local Authority can recover the expense of sale, when any sale takes place a charge bot exceeding 1% if the sale value of movable properties. Section 185 (2) (d) Revenue Source 28 - Entertainment Tax a. Local Authorities collect these taxes under the provisions of the Entertainment Tax Ordinance. This tax is imposed according to the value of the tickets issued for entering the place of entertainment. Generally 10% of the value of tickets issued in cinemas, theatres, entertainment centres, entertainment programmes or shows organized by individuals is collected as tax. This tax should be settled within a month from the date of the programme or the show and failure to do so will result in litigation. Generally for this type of activities a security deposit will be obtained. For MC & UC Entertainment Tax Ordinance Section 2 1. Impose Entertainment tax i. Council decision on Entertainment Tax ii. Obtain approval from the Provincial Minister of Local Government iii. On approval of the Council decision by the Provincial Minister, issue a gazette notification under the

31 Minister s name 2. Charge tax from Cinema Hall Owners(using the label system) i. Call for all the ticket books from the Cinema in advance and label on tickets. ii. Charge the Cinema hall owner according to the value of the labels. iii. Inspect the cinema hall while the shows are on, to check whether there are any other type of tickets are sold. 3. Charge tax from Cinema Hall Owners(using a Council Seal) 4. Charge tax on other shows i. Call for all ticket books from Cinema Hall in advance and place the council seal on tickets ii. Inspect the cinema hall while the shows are on to ensure that there are no other type of tickets are being sold iii. Assess the number of tickets sold on daily basis iv. Compare the above records with the records submitted by the Cinema hall owner to the National Film Corporation v. Charge for the taxes at the end of each month based on the number of tickets sold. i. Use the label system as above and pay the tax to the council in advance.

32 Revenue Source 29 - Charges levied to inspect slaughtered Animals a. The trade of butcher, had to be carried out only on a licence (annual or temporary) issued by the Local Authority. The application for Butchers Licence had to specify the premises where the trade was to be carried out. The procedure to be followed prior to the issue of a licence is given in section 4 to 7 of the Butchers Ordinance. The Councils are authorised to charge a levy to inspect the slaughtered animals under section 11 of the Butchers Ordinance. For MC & UC Section 11 of Butchers Ordinance. Revenue Source 30 Licensing of Clubs a. This Law has been enacted to provide for the control of clubs and for matters connected therewith. In terms of the Section 2 of the Law it is unlawful to run a club without a licence issued by the Mayor/Chairman of the Local Authority. Under section 4 of this Law, the Minister is empowered to prescribe in respect of every Local Authority to scale of fees payable in respect of a license to maintain a club provided however, the fees so prescribed must not exceed the limits prescribed by the Act. MC & UC Licensing of Clubs Act No 17 of 1975 section No Issue of Club License i. Manager of the Club submit an application to the Council ii. Obtain certification as per the requirements of the Act iii. Publish a notice in the Gazette stating the request of license. iv. If there are no objections, charge the

33 relevant fee and issue the license Revenue Source 31 Environmental Protection Licence fees a. The Central Environment Authority has, under the national environmental Act, conferred on Local Authorities, the powers to deal with minor pollution agents in relation to environmental protection. The power to issue environmental protection licences has also been conferred. Minor pollution agents include small scale saw mills, rice mills, stone crushers, livestock farms, garages, printing press and grinding mills. MC & UC Section Number 32 of National Environment Authority Act No 26, of 1988 Please refer the attached Schedule No 1 Revenue Source 32 - Issue of Licences (Trade Licences) a. Local Authorities may impose and levy a duty in respect of licences issued by the council. The duty levied as above in respect of any licences issued by the council authorizing the use of any premises for any of the purposes described in this ordinance or in any by-law made there under shall be determined by the Council according to the annual value of the premises. b. Applicable By-Laws to be read with Section 247 (A) of Please refer Schedule No Identify the premises where the license needs to be issued. i. Conduct a survey, in advance to identify the premises where the licenses need to be issued. ii. Issue the notices in the month of December for the licenses for the succeeding year. Maximum Limit chargable is LKR 5000/- Refer Schedule No 111 for the list of trade activities where licence needs to be obtained from MC

34 2. Issue of Licenses i. Receive requests for Licenses ii. Ensure that the necessary requirements are fulfilled to issue the Licenses iii. If not, notice to issued to rectify the problems iv. Inform the owners when the License are ready to be issued v. Charge the relevant fee and issue licenses 3. Council to take Legal action against defaulters i. Inform the Magistrate s Court having jurisdiction over the area in which the council is situated. ii. Recover the penalty imposed by the Courts iii. Inform the occupier to obtain Licence immediately iv. Issue the License v. If Licenses are not obtained council to get a court direction to wind up the business Revenue Source Public Slaughter House Exposure of flesh of Animals Public Slaughter House- Emergency Permits to transport animals - Public Slaughter House-Transportation of Meats

35 a. The trade of butcher had to be carried out only on a licence (annual or temporary) issued by the Local Authority. The application for Butchers Licence had to specify the premises where the trade was to be carried out. The procedure to be followed prior to the issue of a licence is given in section 4 to 7 of the Butchers Ordinance. Under section 26 to 29 public slaughter house have to be certified as sufficient for the purpose by the Local Authority to the Provincial Minister who would then issue a notice proclaiming such slaughter house. Regulations could be made by the Local Authority in regard to the public slaughter house. The person in charge of public slaughter house could seize and destroy diseased animals brought to the public slaughter house. Under Section 13A of Butchers Ordinance no person can sell or expose for sale or cause to be sold or exposed for sale flesh of any animal at any place other than in a building constructed in conformity with the plan approved by Provincial Secretary to the Ministry of Local Govt. MC & UC If there are slaughter houses within the jurisdiction of the council, the council can impose the relevant sections as per the Butchers Ordinance.