An examination of the financial system of Iranian municipalities and the role of technology within them, along with proposals aimed at identifying new sources of revenue
Abstract
In recent decades, with the rapid development of cities, the scope and volume of municipal responsibilities have multiplied several times. Current revenue sources will not be sufficient to cover the increasing expenses of municipalities in the coming years. Therefore, since managing cities and urban administration requires continuous, reliable revenue streams that keep pace with modern technologies, this issue must be considered one of the most important challenges in city management. In this context, Tehran, as the most populous city and the capital of the country, requires the growth and development of appropriate infrastructure. With the rising population and evolving needs, the existing revenues are no longer adequate to meet the city’s demands.
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Financial System of Iranian Municipalities and Role of Technology
Iran’s municipalities have seven main revenue categories, including taxes, service fees, government grants, and assets. A 2014 roadmap emphasized improving service delivery through better data use and ICT tools to increase transparency and efficiency. However, analysis shows that despite the potential of modern technologies like smart systems and new business models, there has been little significant progress at both the national and municipal levels in adopting these innovations so far.
Infrastructure and Appropriate Technologies for Increasing Revenue Sources and Improving the Financial System of Tehran Municipality
Tehran’s growth requires modern infrastructure and technology. Key elements include:
- Reliable Organizational Structure: A strong tech-oriented framework to coordinate departments and manage information effectively.
- Hardware Infrastructure: Essential facilities and communication tools to support technology use.
- Specialized Human Resources: Skilled experts who design and implement tech solutions, vital for leveraging new technologies and improving municipal finances.
Appropriate Methods for Utilizing Required Technologies
Municipal use of modern technologies generally follows four stages:
- Emergence: Building infrastructure and promoting technology culture, introducing new tools to users.
- Enhancement: Expanding services, strengthening data resources, and upgrading network and hardware infrastructure.
- Interaction: Enabling users to engage with the municipality online through reliable infrastructure.
- Integration: Broadening and diversifying services with process integration across dispersed departments and organizations to improve service quality.
Efficient Model and Strategies for Enhancing Tehran Municipality’s Revenues Using Modern Technologies
Key Criteria for Efficiency:
- Equity: Citizens pay fees proportional to their use of services.
- Transparency: Open access to financial data for public oversight.
- Efficiency: Minimize social and economic costs of fees without causing price distortions.
SWOT Analysis:
- Strengths: Strong IT capacity, faster services, lower digital service costs.
- Weaknesses: High maintenance costs, lack of integrated platforms, no single service window.
- Opportunities: Unified portals, organizational innovation, urban dashboards.
- Threats: Changing tech requiring updates, data security concerns.
Suggested Actions to Increase Revenue:
- Introduce new revenue codes (e.g., vehicle traffic fees, construction debris penalties).
- Utilize tech for new income streams: property rental systems, temporary commercial space leasing, and using unused city spaces for exhibitions.
This study was conducted at Paya Think Tank by Mehdi Alian in 2022.
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