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The chart shows some of Lima's districts, their revenue from municpal fees and property taxes in million Soles and the percentage of citizens not paying their municipal obligations; photo: El Comercio

Municipalities suffer from not paid municipal fees and property taxes

The most populated and poorer districts in Lima have the lowest revenue

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Sunflower - Last Update: May 01, 2017

Municipalities around the globe have to subsist on something to do their job. So most of them levy some sort of municipal fees and property taxes. In Lima with its 43 districts it’s no different.

Here the so-called “arbitrios” (municipal fees) are used to finance Serenazgo - the municipal police of each district, the cleaning of public areas and the maintenance of parks and other green areas while the “impuestos prediales” (property taxes) usually allow to generally improve the district, for example by purchasing security cameras, new garbage trucks or the like.

So, one might expect that the districts in Lima with the most citizens will have the highest revenue and really could shape up the city. But as an article in the Sunday edition of El Comercio, Peru’s biggest newspaper, revealed, actually the contrary holds true.

The citizens of the most populated districts in Lima unfortunately have the poorest payment practice. This may be due to the fact that in these districts Lima’s poorest citizens live that just can’t afford to pay, that they lost their faith in their municipal politicians and fear their money rather supports the ones that already have enough instead their municipalty or that here people fail to realize how important their contribution is for their community and themselves.

While in Lima’s richer districts San Isidro, La Molina and Miraflores more than 90% fulfill their obligation to pay the municipal fees and property taxes, in Villa El Salvador, one of the 5 most populated and poorest districts in the Peruvian capital, 75% of the citizens owe their dues. In San Juan de Lurigancho 60% of the citizens don’t pay their municipal duties, in San Martin the Porres 50% and in Comas 45%. And the sad thing, especially these poorer districts need every Sol to improve the district and living conditions of their citizens.

To get people to pay the necessary, but unwelcome or sometimes even unaffordable municipal fees, the different municipalities in Lima often get creative.

It is not uncommon that citizens that pay before the due day or at least on time receive discounts between 10% and 15%, participate in a prize draw, receive VIP treatment at the municipality, free health care in municipal hospitals, free municipal services such as ambulance service, towing service and locksmith service, or other benefits and discounts for example at certain shops. In some districts retirees with a low income get up to 50% discount and citizens at social risk are exempted from paying the fees.

And even those that haven’t paid on time often get a second (and sometimes a third) chance to pay. Late payment fines are often remitted and small discounts are offered to encourage citizens to participate in upkeeping and improving their municipality.

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