What is a change fund in the context of tax collection?

In the context of tax collection, a change fund is typically established by resolution and is specifically designed to ensure that there are sufficient funds available for making change during the collection of taxes. This fund is vital for efficient operations, allowing for smooth transactions with taxpayers who may owe different amounts or use cash.

The key characteristic of a change fund is that it is not intended to be lent out or spent on operational costs; rather, it is a fixed amount that remains segregated for the specific purpose of providing change during tax collection activities. This helps maintain accountability and ensures that the funds remain intact for their designated purpose.

Establishing this fund through a formal resolution also indicates that there is an official and documented acknowledgment of its intended use, which is essential for financial governance and oversight in municipal operations.