The Blockchain 4 Cities course focuses on the blockchain technology and how it can change the way a city operates or provides services to its citizens and its respective impacts. The Blockchain 4 Municipal Tax project focuses on the tax system of the municipality.

Rights in The City

Article 14 of the european charter for the safeguarding of human rights in the city states that “The municipal authorities guarantee openness and rigorous control of the use of public funds.” This right is not granted to the citizens when it comes to all municipal expenditures.

In parallel, when it comes to municipal tax payments, all the assets and goods of the citizens must be manually registered through private entities, then logged into a database, where tax officers of the city council gather information, and send the tax bill to the people involved. Citizens paying these taxes then go through banks to make the payment. These method are all centralised systems and not automated.

Municipal Taxes

They are taxes that citizen pay to their local municipality in which they are used to fund a wide range of civic services:

Land Tax (IBI), Tax on Mechanically Powered Vehicles, Economic Activity Tax (IAE), Public-Sector Charge for Waste Collection, Garage Entrances, Charge for the Private Use of Public Roads, Pets.

Why Blockchain?

blockchain enables a decentralised and distributed system, can track the taxes paid, makes the process more efficient and automatic and brings trust into the system.

In this project, a tax payment platform on blockchain id developed which enables the citizens to easily pay their taxes and receive the municipality’s transparent expenditures in return. The project follows a bottom-up approach, because the municipality is providing this service for the citizens.

Blockchain Tools

The tools needed for this proposal are transactions and tokens:

1) Utility Token  2) Payment Token  3) Transaction


Utility Token

First, the citizen has to get a utility token Utility token is used to receive services in return. In this case, an ID is created that enables the citizen to access their tax profile and labels their tax payment. Name, supplier, supply and receiver.
Name: My-BCN
Initial supplier: City Council
Initial supply: total population of the city
Receivers: Citizens (One token per person)

Payment Token

The payment token is a local crypto currency that has a value equal to 1 euro. Citizens can pay tax by the payment token which is called e-Tax. They are also responsible for the conversion between euro and e-tax.

Policies Disrupted by Tokens

The tokens bring disruption within the current tax operating syste. Moreover, they disrupt tax policy design. This means that the policies can adapt from general rules to more detailed policies that can be embedded in the code of the smart contracts.


The transaction enables traceability and transparency of the tax by Cellular Automata. First, the transaction serves to send the
municipal tax (fund) and its respective label (embedded in token). Secondly, another transaction is done by the
municipality to share municipality’s expenditures coming from tax fund.

Disintermediation Strategies by Transactions

With this system we are removing 4 middle man

  • City notary (for registering the assets and goods of the citizens because now they are automatically stored in blockchain.
  • Tax officer of city council , transactions are operated based on the latest update for the smart contracts ( example, if a neighbourhoods land value has increased, this change is also embedded in the smart contracts code , and the new tax amount will automatically change)
  • External audits ( for other types of goods registration, such as vehicles and pets , etc,)
  • Banks, where citizens will no longer need to go through to pay their tax.


How does the project empowers people?

By this system the policies can not be corrupted regarding ownership.

And transparency regarding municipality expenses will be granted to the citizens.

The System Diagram

Blockchain for Municipal Tax is a project of IaaC, Institute for Advanced Architecture of Catalonia
developed at Master in City &Technology in (2018/2019) by:
Students: Sarine Bekarian, Mahsa Nikoufar
Faculty: Lluïsa Marsal