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The program of the tax debt payment by work: from excluded to protagonists of the development

  • Peru
  • Provincial Municipality of Ilo
This experience was presented as candidate for the IOPD Award for Best Practices in Citizen Participation 2015


Ilo is an industrial port, situated 2 meters above sea level with an area of 1523.34 km2 and a population of 75,000 inhabitants. It is 95 Km away from Moquegua capital of the department. It is divided into three districts: Pacocha, Algarrobal and Ilo. Its economy is based on activities such as metallurgy (smelting and refining of copper), fishing (fish meal factories and canneries), port services and energy production (Enersur / Tractebel).

ILO has an important local management experience with public participation and consultation with stakeholders, begun in the 80s Ilo is a pioneer in Peru on issues of Management Committees (1985), Municipal Housing Program (1989), Sectoral Councils (1997), tax debt payment program with work (1998) and Participatory Budgeting (1999).

We want to share the experience of "tax debt payment program by work" program that was born in 1998 on a permanent basis and with two clear objectives; first, supporting low-income families who could not pay their taxes with cash, but were willing to make it through another mechanism; and second, in order to create awareness in the beneficiary tax obligations, thus preventing delinquency and default on its debt.


In the city of ILO, although the average income per capita is acceptable (equivalent to 1,160 “new soles” monthly or $ 400), there is also a small segment that receives much less than that and is in poverty.

The program in its first phase (1998-2004) was directed only for indebted families in actual poverty or inability to procure financial resources (indigent or social cases). With the course of time and the corresponding social reports in its second phase (2005 to date) spectrum considering debtors in recent condition or cyclical poverty and debtors from chronic poverty and / or extreme expanded.

We should note than in ILO, a high percentage of the population depends on fishing activity and due to the effects of climate change in the past 18 years has produced in Peru phenomena: "phenomenon of El Niño" and "phenomenon la Niña", which among other things cause fever seawater and hence the scarcity of fish. In this scenario, become visible to the community families in temporary poverty. But have also made visible to the community those families who have their heads home in a greater than 60 years old who have always depended on casual labor, which are no longer employed as before (excluded), and do not receive any state pension, facts that affect household income by taking them into chronic poverty.

Since its social approach, the program is developed in coordination with grassroots leaders (Neighborhood Councils and women's organizations) in order to identify and enroll in the program for low-income families. Such participation extends when developing the annual program is evaluated and proposed improvements for next year's program is elaborated.

The City Council integrated by the Mayor and aldermen lead the program and it is they who approve the annual work plan and proposed improvements to the regulatory framework (ordinance). Municipal Officials in time have recognized the importance of the program for institutional development and social inclusion:

Zulma Aro from the Management of City Services told us: "I thought that using labor program would reduce my budget but in time I realized that was not the case and on the contrary recognized in many of the workers the initiative, creativity and will to do things, it took some of them and hired at a salary to support us in a given period"

Betizabel García, Social Worker told us: "The beneficiaries of the program now feel that take into account, that contribute to development with their work, they feel useful, feel worthy and happy, so much so that when he finishes his work, he no longer want to go, want to stay even working free "

The program in its nearly 17 years of existence has benefited nearly 6,800 families (400, yearly average) and has achieved through raising four million “soles”. Many of the beneficiaries are elderly without retirement benefit, people with disabilities, and people with terminal illnesses, which cannot access a job because of their disability or age. 

We must emphasize that the program allows a close relative to the beneficiaries (if elderly or terminally ill) to work for them. I.e. children, grandchildren or nephews can help pay the debt of his relatives work.

The program works with two people a social and an administrative assistant coach that also serves as a social promoter. Annually is allocated a budget of between 30,000 to 40,000 new soles.

In the time that has gone the experience, have issued three municipal ordinances (1998, 2005 and 2010) and 3 regulations have allowed implement a number of formats, documents and instruments for the operation of the program and defined the methodology and stages the annual program.

The tasks that meet the program's beneficiaries range from: cleaners, gardeners, plumbers, clerks, reporters or distributors of documents, support for file documentation, administrative duties among others. According to the Municipal Ordinance 472-2010-MPI force, recovery of skilled labor and unskilled to man-hours is: skilled labor between 8.33 and 5 new soles per hour; unskilled labor time 3.33 soles.

The program takes place annually in five phases:

Phase 1 Development and approval of the Annual Work Plan, at this stage the work plan is developed, a technical report and a legal report is issued and then formalized with a mayoral resolution.

Phase 2 Call and registration of candidates at this stage with the support of neighborhood leaders and the media to the population program is broadcast.

Phase 3 Evaluation of files and publication of beneficiaries and non-beneficiaries, at this stage the Social Worker interview and evaluates applicants.

Phase 4 Development Jobs (use labor), at this stage according to the service requirements of the various areas of the municipality labor program is distributed

Phase 5 Closing and Closing the annual program, the labor input is valued and Recognition bonds with which the tax debt is canceled are issued.


Throughout the 17 years of the program, there have been many stories, many anecdotes, many experiences of change for the better, we believe it is necessary that other cities are familiar with and if considered important to implement this program as an aid to poorest families, excluded from development.