KIGALI is a charming city. Skyscrapers are rising by the day and most foreign visitors will be impressed by its cleanliness, order and efficiency. It has been among the fastest growing cities in the world in recent years, with a highly visible residential and commercial real estate boom.
The influx of international agencies and aid workers – after the 1994 genocide – also created soaring demand for rental properties. Until recently, it was common to find a large house in Kigali rented out at $3,000-4,000 per month.
Being the capital city of Rwanda – with a population of almost one million people – one might expect that Kigali could raise high revenue in property taxes. Rwanda is also believed to have the most effective tax system. Sadly though, property taxes in Kigali amounted to a measly 3% of local revenues in recent years. This is far below the 20-30% in some neighbouring countries and the 80% it sometimes comprises in developed countries.