The Municipality of Quito charges more than 20 taxes and fees, but little is reflected in works and services

They pay everything from property rights to permits and taxes, but the large amount of resources are not reflected in durable and quality works for the city.

Only in 2021, the Municipality of Quito raised more than $308.22 million through 28 Taxes, fees and contributions, which charges citizens and their businesses. In other words, every day, the people of Quito contributed more than $856,000 to finance the operations of the council.

Among the main taxes there are the urban and rural properties, which last year generated revenues of $73.72 million.

Thus, more than $46.46 million were collected for commercial, industrial and financial patents; $37.93 million in taxes on total assets; and, $26.19 million for alcabalas.

On the side of the fees and contributions, for example, more than $13.19 million were obtained for the collection of services; and another $37.51 million for those questioned contributions for improvements.

Those contributions or contributions for improvementsa large percentage are still used to pay plays questioned, and even with glosses confirmed by the Comptroller, such as Ruta Viva.

Where do the resources contributed by citizens go?

Last year, the municipality recorded $690.49 million in income totals. About 44% (more than $308 million) came from Taxes, fees and contributions collected from citizens. Another 35% ($244.06 million) was the result of transfers from the Central Government through the General State Budget (PGE).

However, only $82.06 million was actually spent on public work. In other words, less than $0.12 of every $1 received was used to improve the increasingly diminishing quality of the city’s roads, improve waste treatment infrastructure, or improve safety.

In the previous two years, in theory, more was spent on public work, especially on city roads ($211 million in 2019 and $111.06 million in 2020); however, already at the beginning of 2021 it could be verified that around 80% of the streets had potholes.

Furthermore, even in those years of apparent best investment, on average only $0.27 of every $1 received went to improving the city’s infrastructure.

bad investments

Andrea Burbano, economist and entrepreneur, commented that the management of municipal resources It not only has to do with the amounts assigned to one thing or another, but above all with the results.

“The waste can be seen in the fact that the vast majority of the works lasted a very short time, were done poorly and were overpriced. In addition, there are contracts observed by the corrupt administration of resources. In the first two years it was spent hand over fist, but very badly; and in the third year the budget fell due to that mismanagement,” he said.

In the last two years, the personnel spending has averaged more than $141 million. That represents more than 45% of what is raised annually through Taxes, fees and contributions.

From January 2019 to January 2022, the payroll of officials in the Municipality of Quito it has gone from 9,330 to 10,106.

Norman Velásquez, an economist and entrepreneur from Quito, pointed out that a comprehensive analysis should be made of all the processes and functions within the council.

“Each city and administration has particular needs and urgencies, but if compared to Guayaquil, the bureaucracy in Quito is 40% higher. According to a report by the Inter-American Development Bank (IDB), the paperwork in the capital is one of the most detrimental to the creation of new companies within the country”, he said.

Another important expense, within the municipal budgetare the more than $164 million that go to maintenance of property, installations and equipment (including vehicles of all kinds).

Emblematic municipal companies are adrift

Despite the fact that more than $100 million is allocated annually for the operations of the municipal companiescurrently two of the most emblematic are with liquidity problems, questioned contracts and low quality in the execution of works.

The drift, with cases of corruption in between, deepened in the last two and a half years. For example, the Empresa de Agua Potable de Quito (Emaps) is involved in up to six criminal proceedings; and in the Public Works, in turn, there are cases such as vehicles and machinery stopped due to lack of spare parts.

In December 2021, the mayor himself, Santiago Guarderas, recognized the unfortunate state of these institutions, and warned that a good part of the work until the change of administration in 2023 will be aimed at trying to solve the problems and unlock the contracts observed or not have been fulfilled. (JS)