Note by moderator: the text below is from the e-mail to the egroup - note the dates given below are not strictly applied here on the forum. You can post in this thread at any time.

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“SUSTAINABLE COST RECOVERY AND EQUITY IN URBAN SANITATION”


TOPIC 2: CAN PUBLIC FUNDING (TAXES AND TRANSFERS) IN SANITATION CONTRIBUTE TO GREATER EQUITY?
7th -13th of November

Dear colleagues,

Welcome to the second topic of our discussion on “Sustainable cost recovery and equity in urban sanitation”. The second topic asks whether public funding in sanitation can contribute to greater equity. The topic runs from today, 7th of November till next Wednesday 13th of November.

Over the past week, we received 14 contributions from 13 people from 9 countries, with two of these coming in just now when I’m typing this. Thank you all for your contributions. I hope to get the summary of the first topic to you over the weekend.

In the first topic we discussed what you see as sustainable cost recovery in city wide sanitation services, that is for all parts of the city, along the sanitation value chain and considering the costs of investments, operation and maintenance, repairs and renewal of assets. Most of you indicated that tariffs should cover costs of day-to-day operations and intermittent maintenance, while in most cases you expect upfront infrastructure investments and asset renewal to come from taxes or transfers. You also spoke about affordability in relation to tariffs and about some countries having a low tax base.

It is clear that affordability challenges are not uniform across the entire population, nor are the costs of services the same in all contexts. It is also clear that tax money is always limited with many competing demands, not only from sanitation. Hence there are trade-offs in the decisions about where to use money coming from taxes or transfers. While larger infrastructure investments are often paid from loans, these loans are ultimately paid back from tax money. It maybe though that this is national tax money -paid by everybody in the country- for infrastructure that only benefits a certain group of people in certain cities.
In the latest JMP reports, there was a focus on rates of change and service gaps between the richer and poorer groups in a country. It was clear that these gaps exist in all countries. The SDGs are of course all about inclusion and reducing inequality. However, when we look at the sanitation investments paid by taxes and transfers, these are not always directed towards the poorest groups. For example, investments in sewer networks for the central business district, can be assumed to increase service levels for the better off people in a city.

The discussion questions are:
1. Do you consider that the current use of taxes and transfers in sanitation (in your city or country) is contributing to reducing inequality in sanitation services? Why/ Why not?
2. Do you think that this is even a realistic and/or desirable expectation?
3. In your view, what would be required to ensure the use of taxes and transfers contributes to reducing inequalities in sanitation services? (or said otherwise: “how?”)

Again, I realise that these are not the easiest questions to answer, so feel free to discuss the topic more broadly. Either way, I am really looking forward to hear from you.
As for the previous topic, you can contribute by replying to this email and please mention your name, organisation and country in your reply. This will help others to understand your message better.

Best,
Ant.

Very happy to be reading all of the exchange on the two discussion topics around equity and sustainability of urban services. Very critical and timely discussions to be having, so many thanks to SNV for organizing and everyone who has contributed already. I'm sharing a few thoughts below on the current set of questions... they are generalized rather than tied to specific city cases, but partners should be publishing supporting data soon.

• Do you consider that the current use of taxes and transfers in sanitation (in your city or country) is contributing to reducing inequality in sanitation services? Why/ Why not?

Referring to several of the cities where we are making significant grants, I tend to see increasing conversations about equability in use of public finance which is fantastic. In practice however, publicly-financed transfers and concessional lending to urban sanitation authorities tend to be overwhelmingly regressive.
- There tends to be inequity across cities in a country, with some receiving the overwhelming majority of finance and others receiving none.
- In nearly all our partner cities, there is inequity within cities, with networked communities receiving several-fold the amount of funding relative to LICs or non-networked communities even when the networked portions of the city are a small portion of the city and network expansion targets are limited. Most neglected might be the low income urban communities that fall outside of a utility service area boundary or city boundary and would technically be covered by a rural-facing department entirely unequipped and unresourced to address urbanized communities' planning and investment needs. It is worth clarifying that not all cities have both sewered and non-sewered systems and that LIC/non-LIC categories are not universally synonymous with non-sewered/sewered infrastructure.
- There are inequitable assumptions about how finance can be used in cases of networks vs non-networked hardware. For example, networked sanitation loans are subsidized and paid back after long grace periods over the course of infrastructure lifetime (or transferred to the public outright if the utility is not able to service debt from a ministry loan). In too many low-income country cases in our grantee geographies, these tax-subsidized investments target small areas of the city; the actual achievements fall far short of the planned investments but loans must be repaid irrespective of the actual resulting benefits or lack thereof. For on-site households--often the lowest income ones--are expected to invest in public good components of hardware (like containment that supports city safety goals) using HH private cash, often with some level of interest rates, a significant down payment, no grace period and a repayment period that is rarely longer than 12-18 months.
- In one city a series of three sewer-related investments (a mix of grants and loans) have barely nudged the city forward on networked coverage rates but amount to upwards of $0.5B, where as $30m was earmarked for services in the ~75-80% of the city not even in the plans to get upgrades
- There is an opportunity to revisit financing norms in urban sanitation to avoid repeating some longstanding patterns in urban water, captured well this summer by the WB report summarized here: blogs.worldbank.org/water/smarter-subsid...water-and-sanitation

• Do you think that this is even a realistic and/or desirable expectation? We cannot make meaningful progress toward the SDGs or inclusivity unless the sector is able to flip regressive norms and incentivize investment and service delivery in low income urban communities.
• Concerns about undermining market incentives or user incentives to sell/use toilets respectively are simply a function of investment and subsidy design not its existence.
• With good design of financing packages, cities can improving equity and affordability w/ public finance w/o undermining market forces or constructive user engagement. In fact, well designed subsidies and publicly financed incentives should spur growth of private sector and change user behaviors for the better. Formalized affordable markets can enable private sector growth and investment. Furthermore, concerns about perverse incentives tend to be raised with respect to transfers to low income communities more often than with respect to the hundreds of millions dollars invested in networked systems that repeatedly fail before or soon after they are commissioned.
• What is exciting is that there is the prospect of aligning more equitable and efficient investments with improved utility or city authority financial viability outcomes. Good public coordination and investment in market structures that can turn a city's 70-100% of urban households into large numbers of paying customers - this is makes subsidizing connections or decent containment an investment in generating revenue. There are several cases where customer fees would not only generate revenue but would result in lower costs to low income households (who pay high costs to private sector providers for substandard services) and would give them a better shot at receiving safe and sanitary formalized services. This of course varies significantly by each city scenario. The foundation is supporting economic regulators and utilities to map out for their respective service areas and explore how different investments and service models could be used to optimize revenues and progress toward SDGs. Earliest outputs from that analysis should be ready by the end of 2019; a shareable tool should be ready at some point in 2020.

• In your view, what would be required to ensure the use of taxes and transfers contributes to reducing inequalities in sanitation services? (or said otherwise: “how?”)
- Nothing sustained can be achieved without investing directly in building capacity of public authorities--those with a clear and inclusive mandate to deliver urban sanitation services--especially their staff technical and problem solving capacity, and authorities' management information systems for financial, service, and asset management to inform investments and decisions.
- Nothing sustained will be achieved without accountability systems--that also must be built on MIS systems linked to authorities' systems--to help inform and guide authorities' investments and hold them to count for using revenues to expand and improve delivery of mandated services with inclusivity, efficiency and proper resource planning and management

Alyse

Note by moderator: This contribution is from Chola in Zambia:
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Dear All

My name is Chola Mbilima. I work for NWASCO the water supply and sanitation regulator in Zambia. My answers to the discussion questions are as follows:

Question 1:
Yes the taxes and transfers do contribute to reducing inequalities. Projects that have been funded using transfers and taxes have targeted the provision of sanitation facilities for the low income communities. The challenge in ensuring that sanitation services are provided across the entire sanitation service chain has been that containment facilities that are in existence which compromise safe managed sanitation.
This is coupled with a mechanism to allow beneficiaries to pay for their containment facilities over a period of time through the sanitation bills which brings in an aspect of ownership and responsibility for the facilities provided using taxes and /or transfers.

Question 2:
Yes. If we are to achieve the SDGs. As the situation is now, sanitation is not prioritized by households hence less appreciated. However, the implications of not having safely managed sanitation are far reaching. In order to ensure protection of the environment and safety of communities there is need to invest in sanitation and also activities that will assist is raising its agenda at household level.

Question 3:
Clear Policy and Legal framework that set standards for and expectations of sanitation services. This should be coupled with a clear financing mechanism that takes into consideration subsidies for low income communities and how these will be targeted. A well structured tariff setting system will also be inevitable to ensure that once facilities are provided they will be paid for, to guarantee sustainability.

Regards
Chola
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Note by moderator: This contribution is from Emily in Zambia:
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Good morning, my name is Emily Banda, SNV, Business Development Advisor, Zambia. My contribution to the Following Questions is as follows:
1) Do you consider that the current use of taxes and transfers in sanitation (in your city or country) is contributing to reducing inequality in sanitation services? Why/ Why not?
Yes the current use of taxes and transfers in Sanitation in Zambia is contributing to reducing inequality in sanitation services: The mandate to supply Sanitation services to the cities is held by Commercial Utilities (CU) and thus customers of the CU who have a sewer connection pay a sewerage charge for services but, on top of this, all CU customers also pay a sanitation levy (redistributive taxation) that is ring-fenced for expenditure on sanitation improvements in low-income communities. Also, we have NGOs through Sanitation projects working hand-in- hand with various stakeholders to ensure that the poor have safely managed sanitation services. For instance, The Lusaka sanitation levy was introduced following a period of substantial sector reforms, in response to demands from the regulator NWASCO that Lusaka Water and Sewerage Company (LWSC) should start providing sanitation services to low-income communities.

2) Do you think that this is even a realistic and/or desirable expectation?
Yes this is realistic for instance in Lusaka, since 2012 expenditures form the Sanitation Levy to date have included subsidized construction of about 200 onsite sanitation facilities in three low-income peri-urban areas lying outside the direct area of responsibility of LWSC (Kanyama, Chaisa and Chipata), and ongoing part-financing of construction of a condominial sewer system in Kalingalinga peri-urban area

3) In your view, what would be required to ensure the use of taxes and transfers contributes to reducing inequalities in sanitation services? (or said otherwise: “how?”)
Strong Regulation and transparent accounting is critical: Sanitation taxes and transfers can only be effectively ring-fenced for pro-poor use if there are transparent rules defining how it can be spent, and transparent reporting of how it has been spent.

Emily
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Note by moderator: The following contribution came from Yerri Noer Kartiko in Indonesia:
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Metro Municipality Government runs desludging service in our city. The service is provided still under “on call” response or when a household was having a problem with the toilet and/or septic tank. The Government receives a certain amount of money after this service has been performed, after the people get a service. People pay retribution. On the other hand however, we do not have updated data regarding the condition of each toilet and septic tank in the entire area of the city. For the lond run, the tariff is perhaps not recovered with the cost of services given.

This is not a good condition. The Metro Government shall invest a lot of money for sanitation development. On the other hand and at the same time, The Government has a very limited resources, particularly in budget allocation for sanitation sector. Thus, The Government shall focus to public empowerment, public engagement and participation in development program.

The Government shall be careful to determine the tariff of retribution and applying public financing. The Government can invite public for open discussion to deal with this issue.

We can implement the principle of “polluter pays”. Every person shall be responsible to manage their waste themselves. When they cannot do this management, they shall give the responsible to a competent agency, by paying a certain cost as a compensation.

1. We calculate the total cost for financing of all componentss of our urban sanitation, such as: a. workforce cost; b. operational and intermittent maintenance cost for machines, vehicles and installation unit; c. management cost; d. ecological safety and security cost as well.

2. We calculate the total number of people who live in our city area.

3. The result of number 1 divided by the result of number 2. We have basic sanitation cost for each people.

4. We arrange the categorization customer, such as: private and government, kind of livelihood of people, level of daily or monthly income. Based on this categorization, we arrange the rule for subsidy system.

5 Metro Government issues the local rules related to sanitation, routine desludging system, and so on.

Yerri

Yerri Noer Kartiko
Environment Division in Metro City Local Government, Lampung Provinces, Indonesia.
Secretary of Environment Division

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Note by moderator: This one is from Fred in Tanzania for Topic 2:

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Hello!

My name is Fred Lyimo from Arusha WSSA in Tanzania.
1. Do you consider that the current use of taxes and transfers in sanitation (in your city or country) is contributing to reducing inequality in sanitation services? Why/ Why not?
Yes,
However, most of the areas in Arusha are unplanned and in most of these unplanned areas (Like Ungalimited, matejoo, uswahilini) are occupied with low-income individuals. These areas lack proper sanitation services while the wealthy areas are more likely to have sewerage network as they are planned as a result the wealthy are being serviced before the poor

2. Do you think that this is even a realistic and/or desirable expectation?
Yes, the use of taxes and transfer can reduce sanitation service inequality, for instance through AfDB soft loan (USD 233mil) for service delivery improvement in Arusha is now improving the sanitation services in Arusha by increasing sewerage service coverage from 7.6% to 30% building new and big WSPs ( the sewerage network in Arusha covers mainly the CBD area with a total length of 49.106km, but now the AfDB project is on motion to increase the sewerage network by 400km including the peri-urban areas). Moreover, onsite toilets will also be built in public areas like markets, schools, bus-stands to reduce sanitation inequality. These developments will be repaid through government taxes although the tax base in TZ is narrow because of most of the revenue from taxes are collected from the formal sector (i.e. the public and private servants, formal businesses while the majority of individuals pay a little amount of tax resulted from VAT on products consumed etc.

3. In your view, what would be required to ensure the use of taxes and transfers contribute to reducing inequalities in sanitation services? (or said otherwise: “how?”)
Subsidize sanitation alternatives in the unplanned and low-income areas (such as pit latrines, cesspit emptier, onsite sanitation etc

Regards,
Fred

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Note by moderator: This one is from Doroth in Tanzania for Topic 2:

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Hello,

My Name is Doroth from Arusha City. Greetings to all. I would like to contribute to this topic as follows;


1 ) Do you consider that the current use of taxes and transfers in sanitation (in your city or country) is contributing to reducing inequality in sanitation services? Why/ Why not?
With reference to different cities and towns in Tanzania this question could be a Yes Or No answer. This depends on the locality and community concern. In major cities such as Arusha, Mbeya and Mwanza the taxes and transfers in sanitation reduce inequality. This is because the majority of the community can accommodate the charges in their daily expenditure. therefore will be willing to pay and find somewhere they can access sanitation services in a proper and sustainable manner. In cities like this, the use of taxes it reduces inequality because every family gets access to sanitation services and pays according to what they use. They are being charged out of percentages used in consumed clean (tap) water. However, in small towns and at outskirts of major cities the situation is quite different. Most of these areas are not covered by the sanitation networks in general despite the facts that some of them are connected to tap water. in a situation like this, the use of taxes and transfers of sanitation increases inequality because they are the majority while the minority in major city are being serviced first.

2) Do you think that this is even a realistic and/or desirable expectation?
In my view, the use of taxes and transfers is very realistic but the expectation is not as what we see. According to the expenses and expertise needed in the provision of sanitation infrastructure and running cost there,s limited chances of getting initial capital outside taxes and transfers. On one hand, the uses of taxes should be there as a big investment. But on the other hand, to have desirable expection we need to change the priorities to whom we serve first. For example, instead of only taking into account major planned city areas, we could focus much more in the majority who live in unplanned settlements in the outskirts of cities and towns.

3) In your view, what would be required to ensure the use of taxes and transfers contributes to reducing inequalities in sanitation services? (or said otherwise: “how?”)
We can decide to subsidize initial cost on-site sanitation services or at least to what should be paid while emptying and transfer of faecal slug from those areas with no sanitation system. However, putting more efforts in public toilets would serve to reduce equality both financially and physically.

Regards.


TP. IR. Doroth Absalom
Urban Planner
Arusha City Council
BOX 3013
Arusha
+255 756 035 155

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Note by moderator: This is from Horacia from Mozambique:

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Dear all, this is Horácio Quembo from Mozambique. Below my comments about the topics under discussion.

1) Do you consider that the current use of taxes and transfers in sanitation (in your city or country) is contributing to reducing inequality in sanitation services? Why/ Why not?
Yes and no at the same time. Yes, because we can see some investments in sanitation across the country. No, because the investments are centred in big towns, and capital cities and not in small and per urban areas of Mozambique (places with significant number of people). These We have to develop clear strategy to reduce the inequality. Our legal framework is clear but we have to do more in the implementation side.

2) Do you think that this is even a realistic and/or desirable expectation?
This is desired expectation for us. Investments are not respecting the entire sanitation value chain/cycle and the priorities are not clear.

3) In your view, what would be required to ensure the use of taxes and transfers contributes to reducing inequalities in sanitation services? (or said otherwise: “how?”)
For my country situation.
• We need the reinforcement and implementation of the legislation/regulations, etc;
o Creating enabling environment for the involvement of private sector and other stakeholders.
o Strengthening the mechanisms of people participation demanding and paying for better services, etc.
• We have to include sanitation in the priorities of country/towns plans;
o Allocating budget and other required resources, etc
• We have to develop a good perception of the importance/relevance of sanitation value chain and develop the willingness to invest on that.

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This contribution is from Yerri in Indonesia:

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I continue my answer for the three question in topic 2. We also should consider and pay attention to political timespan matter. In some city, Metro city as well, there is city mayor election in every five year. I think this is critical zone. City mayor can change, government officer can change, policy can change, development can change, sanitation budget as well. So, allocation of money for sanitation issues can change. It will be little bit creepy when all of sanitation cost is only depend on government money. For the sustainability of sanitation cost, we should think about public participation, contribution, engagement, empowerment for these issues. So, sanitation program will not be disturbed by political changing. We can run sanitation program by using public financing.

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The text below is from Flaviana in Tanzania:

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My name is Flaviana Kifizi from Shinyanga WSSA in Tanzania. My response to the questions are as follows;

1. Do you consider that the current use of taxes and transfers in sanitation (in your city or country) is contributing to reducing inequality in sanitation services? Why/ Why not?

Currently Shinyanga has no proper sanitation services. Residents of Shinyanga have tap water in their houses with septic tanks mostly in urban area. In this situation, taxes and transfers will increase inequality in sanitation services because those with water services will be serviced while those without water services they won't be serviced.

2. Do you think that this is even a realistic and/or desirable expectation?
On my side, I thinks this is a realistic/desirable.

3. In your view, what would be required to ensure the use of taxes and transfers contribute to reducing inequalities in sanitation services? (or said otherwise: “how?”)
Put more effort in sanitation services in low-income areas. As here in Shinyanga we have constructed low-cost improved pit latrines in low-income areas. People in these areas can opt for this solution for sanitation services.

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The contribution by Lena from Indonesia for Topic 2 is below:

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Hi,

I am Lena Saptalena, WASH specialist from SNV Indonesia. My view on whether public funding in sanitation can contribute to greater equity/not:


1) Do you consider that the current use of taxes and transfers in sanitation (in your city or country) is contributing to reducing inequality in sanitation services? Why/ Why not?

Yes and no.

Yes, as the case in other countries such as in Bangladesh (explained by Marc), here in Indonesia we also have a number of programs, funded by taxes and/or transfers, which is contributing to reducing inequality in sanitation services.

a. Taxes
• Source at the national level: APBN (national budget, collected from all Indonesians through taxes). Distributed through:
o Several ministries:
 Ministry of Public Works & Settlement: mostly for big infrastructures, such as faecal Sludge Treatment Plants (283 plants; Indonesia has 514 districts & cities, some such as Jakarta has more than one STPs, some others have none), 249 small-scale domestic Wastewater Treatment Plants (WWTPs), and city-scale WWTPs/sewerages (in 13 cities)
 Ministry of Home Affairs, Ministry of Health, Ministry of Religious Affairs: promoting/implementing Total Community Led Sanitation (STBM) programs

o Direct Transfer to Local Government and Village Fund
 Special Allocation Fund (DAK)
 Village Fund for villages in rural areas (Dana Desa): this maybe contributing to reducing inequality between urban and rural
 Village Fund for villages in urban areas (Dana Kelurahan): in SNV project city, Tasikmalaya, this is used to support Open Defecation Free (ODF) by providing toilets and for communal WWTPs construction. Normally villages that are declared as Slum areas (through Mayor’s Slum Decree) have more priorities to access this, but this is up to the city planning agency (Bappeda/ Bappelitbangda)  this maybe contributing to reducing inequality between the rich and the poor, BUT, just because a village is declared as slum it doesn’t mean that everyone there are poor. Majority are poorer than in other villages.


• Source at the province level: APBD Provinsi (province budget). It has a house improvement program. The fund can only be accessed by districts/cities that could meet several criteria, for example having Slum Decree (so, this is likely contributing in decreasing inequality between the rich and poor). Can be used to provide toilets. However, in case of West Java (where SNV project city, Tasikmalaya) is located, depletion is low because LGs could not meet some readiness criteria.

• Source at the district/city level: district’s budget (APBD Kabupaten) / city budget (APBD Kota). This comes from city’s taxes and revenues (PAD).
o In general, less than 1% is allocated for sanitation (most sanitation fund comes from the national level). And by sanitation, it covers 3 sectors:
 Solid waste
 Drainage
 Domestic wastewater  this is where most O&M budget to operate faecal sludge treatment plant comes from

In most cities, solid waste & drainage have biggest portions (have more priorities). So, the portion for domestic wastewater treatment is much less than 1% of the district/city budget. Also, it is not very easy to say how much the exact portions because:
• Some budgets for solid waste & domestic wastewater are mixed up. In many cases, treatment plants are located next to solid waste landfill. The operators who work at the treatment plants are also working at the landfill under UPTD (institutions that manage both).
• Budget structures are not so easy to categorized (in my personal opinion) because they are itemized. For example, I have seen cost structures at IPLT Duri Kosambi in Jakarta (operated by PD PAL). No categorization for labors, chemicals, utility etc costs. They are listed as long list of items. However, effort is currently being made to categorized them for easier assessment


b. Transfer

• Loans
o ADB and similar loans
• Grants:
o DFAT (Australian Government funded programs), such as KIAT: sAIIG (grants for city sewerage), PCSP (Palembang City Sanitation Project), Hibah Sanitasi (Sanitation Grants),..
 In case of sewerage, the scheme is through reimbursement. So, districts/ cities use APBD Kota or DAK budget first, then they got reimbursed. However, the beneficiaries pay nothing (they are free to connect to sewerage). Because of the pressure to get reimbursement (do not want to fail to receive reimbursement), sometimes LGs would select areas that are more willing to connect (if a community refuses the sewerage development, the LG moves it somewhere else). Therefore, perhaps not really reducing inequality because selection is not based on ability to connect/not. Could be improved through good sanitation social marketing programs.

o
• SNV
o Rural (completed) and urban sanitation (on-going) programs  capacity building programs for Local Government and relevant stakeholders. I think this contributes in reducing inequality by a lot because it puts a lot of emphasize on GESI (gender and social inclusion (increasing sanitation access for socially excluded groups such as the poor, people with disability, elderly, marginalized people and all other vulnerable groups)) as well as CVR (climate vulnerability & resilience) (to increase resilience of vulnerable groups in terms of climate risks affecting sanitation facilities/ infrastructure

• National Slum Upgrading Project (NSUP) and Cities without Slums (KOTAKU): programs that provide grants for slums to improve access in sanitation, water access, etc  definitely directed towards reducing inequality

• CSR: not really reducing inequality because amount is still small (sanitation is not attractive issues for companies) and companies would often refuse to do so for slums (not good visibility)



2) Do you think that this is even a realistic and/or desirable expectation?

Yes.

3) In your view, what would be required to ensure the use of taxes and transfers contributes to reducing inequalities in sanitation services? (or said otherwise: “how?”)

• First, investment should be made more efficient. Many plants (>80% sludge treatment plants) are non-functioning due to mismanagement. I think it is hard to justify if we only build, neglect, and rebuild, especially for big investment. If this is improved (e.g. through allocation of “software costs”), there will be less waste and could be allocated for other needs, and focused/used for more vulnerable groups.

• I think sewerage and all other big investment should be allocated for more vulnerable groups and to reach more impact. For example, areas which have combination of high population density + no access to piped water supply + high occurrence of poor-sanitation related diseases. Some facts:

 80% population don’t have access to pipe water supply
 39% HHs (27 million HHs) use groundwater for drinking; 57% of them are the lowest 40% wealth quintiles.
 9.4 million Households (HHs) have groundwater wells less than 10 m from faecal sludge containment

Thank you.

Best regards,

Lena Ganda Saptalena
Senior WASH Specialist

SNV Netherlands Development Organisation
Jalan Kemang Timur Raya No 66 | Jakarta 12730 | Indonesia

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Contribution by Ika from Indonesia submitted by e-mail for Topic 2:

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Dear all,

I am Ika Yuniarti from Indonesia. I work for The Regional Development Planning Agency of Metro City Government.
My contributions for the discussion questions are as follows :

1. Do you consider that the current use of taxes and transfers in sanitation (in your city or country) is contributing to reducing inequality in sanitation services? Why/ Why not?
Yes, the use of taxes and transfers can reduce inequality in sanitation service. In Indonesia, Special Allocation Funds (DAK) transferred directly to districts and municipalities from the central government to improve water and sanitation. It is to fund some program associated with poverty reduction to develop sanitation infrastructure for the poor families in slum areas.

2. Do you think that this is even a realistic and/or desirable expectation?
Yes, this is realistic. The central government has increased attention and transfers in sanitation. However, it seems that sanitation is low priority for most of local governments. Therefore, central government needs to develop a public expenditure framework for sanitation and also assist local governments to increase finance for sanitation.

3. In your view, what would be required to ensure the use of taxes and transfers contributes to reducing inequalities in sanitation services? (or said otherwise: “how?”)
Strong regulation framework, subsidize for the poorest and raising awareness within communities.


Regards,
Ika Yuniarti

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