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Established in 2006 as a Community of Reality

Welcome to the Neno's Place!

Neno's Place Established in 2006 as a Community of Reality


Neno

I can be reached by phone or text 8am-7pm cst 972-768-9772 or, once joining the board I can be reached by a (PM) Private Message.

Established in 2006 as a Community of Reality

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    The role of payment systems in the governance of non-tax revenue collection

    Rocky
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    • Post n°1

    The role of payment systems in the governance of non-tax revenue collection Empty The role of payment systems in the governance of non-tax revenue collection

    Post by Rocky Tue 30 Jan 2024, 3:02 pm

    The role of payment systems in the governance of non-tax revenue collection

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    Economic researcher Ali Dadoush



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    Economy News - Baghdad
       Financial technology payments take advantage of large digital platforms to fill the gaps in the traditional payment system, the most prominent of which are (mobile payment, online payment, and other digital money). These have the ability and efficiency to achieve the best collection of public revenues, especially tax and non-tax revenues, meaning that technology Finance helps the financial department achieve optimal collection of the state treasury.
    The use of financial technology in financial policy also achieves various benefits - including enhancing financial transparency, improving public budget planning and implementation, and modernizing cash management - if the institutional and technological capabilities of the government (public sector) are strengthened and the waste of public money is reduced.
    Table (1) shows the most important areas in which financial technology can improve financial policy management, as well as the benefits achieved if financial technology is used to collect non-tax revenues in particular.
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    Table (1) Payment applications using financial technology in financial policy management
     
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     CBDC (central bank digital currency) = central bank digital currency, public financial management (PFM) = public finance management, government-to-business (G2B) = government-to-business, government-to-persons (G2P) = government-to-people, business-to-government (B2G = business to government.
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    It is generally noted that there are two main categories of non-tax revenues in fiscal policy:
    1- Non-tax revenues resulting from royalties and the like, such as those coming from extractive industry sectors and dividend payments from state-owned companies.
    2- Non-tax revenues from fees for goods and services provided by government agencies, such as issuing passports, port fees, agricultural services fees, fines and police penalties, as well as some health and educational services. 
    Governments (public sector companies) have benefited from the features of financial technology payment, as they provide additional ways to make payments using electronic payment platforms, and in some cases mobile money (the Internet), as financial technology payments allow users to make payments at any time and at any time. Anywhere using multiple payment platforms, which could include central bank digital currencies in the future if the infrastructure and overlay are available.
    Table (2) shows the process of governance and collection of non-tax revenues through different payment systems in line with developments in financial services based on advanced technology, which leads to increasing revenues and collecting them in full for the state treasury, thus increasing the contribution of these revenues to the total revenues that finance expenditures. The government in Iraq.
    The use of financial technology in collecting non-tax revenues requires a data exchange process covering the cost of the service/good provided by the government, or the amount of fines/penalties, and a payment gateway (government linked directly to the state treasury) to collect it from users or beneficiaries of government services. Therefore, it may require a system Non-tax revenue collection Integration with many public service delivery systems managed by government agencies to capture the cost of services/goods. 
     
    Table (2) The use of financial technology payments in the governance and collection of non-tax revenues
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    Source: Researcher based on:
    IMF library, (2023): Fintech Payments in Public Financial Management: Benefits and Risks.

     
     
    Once non-tax revenues are collected, the service delivery systems are automatically updated to provide proof of payment. This functionality can also be included as a module of the Financial Management Information System (Fiscal Policy). If specific service delivery systems do not exist, or if it is not possible to integrate them, it will The payment interfaces used by payers need to be configured so that proof of payment is guaranteed.
    In addition, to benefit from financial technology payments in collecting non-tax revenues, the state treasury must either develop its own payment gateways or integrate its gateways with those developed by service providers or private payment companies (or restructure them as will be done in government banks according to the government’s decision). Iraq), and in both cases the systems must be updated to include services and their accounting classifications to update the accounting system in the financial management information system, and the system must also ensure appropriate (back-end integration) with government bank accounts to collect funds in a timely manner. Therefore, the use of technology payments Finance requires the state treasury to modernize current business operations and establish a financial management information system, as close coordination with the agency responsible for providing goods and services is essential to ensure the accurate collection, accounting, and settlement of funds related to the collection of non-tax revenues.


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