Standard Operating Procedure for Fiscal Management in Kabul Municipality

This procedure applies to all central and district offices of Kabul Municipality. The document outlines the procedures for fiscal management, including analysis of the economic development of Kabul City, analysis of actual revenue and spending figures, and analysis of revenue options. The Department for the Current and Development Budget is responsible for maintaining statistics and information relevant to the economic development of Kabul City. This includes figures on population size and growth, labor force participation, employment and unemployment, municipal outputs, and revenue potential. The annual budget document will start with an analysis of Kabul's economic development in the year before the budget year. Districts are required to report revenue potential factors to the center on a quarterly basis. The Department for the Current and Development Budget continuously monitors budget execution and produces budget execution reports on a monthly basis. Districts are required to submit quarterly revenue reports, accompanied by a narrative explaining cases of over- or underperformance. The municipal financial report, published annually, contains an analysis of deviations in revenue and spending. The General Directorate Revenue analyzes options for revenue reform, including adjusting valuation norms for the safā’ī charge, business license fee rates, and rent levels for inflation. The General Directorate Revenue engages in dialogue with national government and other stakeholders to improve revenue policies and legislation. The General Directorate Revenue continuously monitors the strengths and weaknesses of its revenue system and sources. The budget contains a revenue forecast derived from annual district level Revenue Improvement Action Plans (RIAPs). Forecasts avoid unrealistic optimism to protect the credibility of the budget. Revenue forecasts are not based on spending needs. Kabul Municipality updates its Medium Term Fiscal Framework (MTFF) each year, with forecasts for revenue and spending over the next three years. The MTFF is published along with the budget, before the start of the budget year. The spending forecast partly depends on the Capital Improvement Plan.