African Property Tax Initiative (APTI)

Discover the new APTI Library here: www.eldis.org/apti  

Although property taxation is widely known to be among the best forms of taxation for ensuring equity, economic growth, and providing stable funding for local governments, it has remained highly underused in many parts of the world, including Africa. This has created a vital need for improved property tax policies and implementation frameworks on the continent.

APTI’s main objective is to stimulate and encourage wider use of more effective property tax systems in Africa. We are working to build the critical mass needed to successfully support African governments that are considering or currently undertaking property tax reforms. To this end, APTI is currently engaged in:

  • Establishing a well-resourced network of property tax practitioners, policymakers, and researchers who can support and learn from each other, and
  • Producing and disseminating robust research on key themes to inform policy and practice.

Areas of Focus

Over the next two years, APTI’s activities will focus on four priority themes, namely:

1. Strengthening the use of information technology for property tax,

2. Exploring locally appropriate approaches to valuation,

3. Examining the roles of local and central governments in property tax collection, and

4. Investigating the link between property taxation and public services in enhancing the relationship between governments and citizens.

Value Proposition

To successfully support property tax reform across Africa, APTI’s activities are designed to enhance opportunities for collaboration and provide real benefits to participating stakeholders. Therefore, APTI will generate and organise:

  • Quality research outputs such as working papers, policy briefs, and practical guides that offer insight into issues inhibiting the fulfilment of property taxation’s potential, and lessons for improving outcomes;
  • Capacity building events tailored to increase understanding of political and operational property tax issues for professionals in both central and local governments; and
  • Network meetings that will be a unique platform for dialogue, bringing together stakeholders to share their experiences, debate salient issues, and lead Africa’s agenda on property taxation.

Organisation

The APTI will be a virtual network, formally part of the International Centre for Tax and Development. It will be overseen by a Management Committee comprised of:

  • Professor Wilson Prichard (University of Toronto and Institute of Development Studies) (Chair)
  • Dr Samuel Jibao (Centre for Economic Research and Capacity Building, Sierra Leone)
  • Paul Fish (Revenue Development Foundation)
  • Dr Tom Goodfellow (University of Sheffield)
  • David Nguyen-Thanh (GIZ)

The Project Leader is Nyah Zebong, who has a Phd from Dundee University in Petroleum and Mining Taxation, and was previously a tax inspector with the revenue authority in Cameroon. He will be responsible for establishing close partnerships with revenue agencies and researchers across Africa, who will become the drivers of the work of the APTI.

Opportunities for Engagement

We are seeking to identify researchers interested in property taxation in Africa, with whom we can work, as well as governments with whom we may partner in offering advice and support, or conducting research. If you are interested, please contact Nyah Zebong at za.nyah@ictd.ac and/or Wilson Prichard at wilson.prichard@utoronto.ca.

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See the briefs on APTI's four core themes

September 2017
Linking Property Tax Revenue and Public Services
by Wilson Prichard

In practical terms most property tax reforms are, first and foremost, efforts to increase tax revenue. But the ultimate goal of tax reform is, of course, broader: expanding tax revenue in order to finance the provision of valuable publicly-provided goods and services. Tax reform is only socially desirable if tax revenue is, in fact, translated…

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September 2017
Central-Local Government Roles and Relationships in Property Taxation
by Tom Goodfellow

Should central or local governments be responsible for collection and administration of property taxes? There is great variation in practice across the continent, but one particularly significant divide is that between francophone and anglophone countries. The former commonly adopt centralised systems, while the latter usually decentralise key aspects of property taxation such as collection and…

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September 2017
Strengthening IT Systems for Property Tax Reform
by Wilson Prichard & Paul Fish

The introduction of improved IT systems has long been hailed as a powerful – potentially transformative – tool for strengthening local property taxes. Yet in practice this promise has rarely been achieved on a sustainable basis in Africa, despite significant investment. The challenge lies in understanding why new IT systems have failed to deliver promised…

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November 2017
Valuation for Property Tax Purposes
by Nyah Zebong, Paul Fish & Wilson Prichard

Improving processes for valuing properties lies at the heart of efforts to improve the overall effectiveness of property taxation. Effective property taxation is impossible without efficient property valuation. I practice, however, valuation rolls across most of Africa are incomplete and severely out-of-date, thus dramatically reducing potential property tax yield. This is, at least in part,…

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za.nyah@ictd.ac

News and Events:

January 2019
news
APTI featured at Developing Urban Futures conference

The ICTD’s African Property Tax Initiative (APTI) was recently featured at the Urban Age conference in Addis Ababa. The conference, on the theme “Developing Urban Futures” was jointly organised by LSE Cities at the London School of Economics and the Alfred Herrhausen Gesellschaft. It convened urban experts, policymakers and practitioners from sub-Saharan Africa and other…

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Publications:

How Local Authorities Can Exploit the Potential for Effective Property Taxes: A Case Study of Harare
by Munatswi Nengeze

Property tax is tax charged on real estates or immovable assets. The tax base may be on land only, land and improvements on the land, or improvements on the land only. For the purpose of this paper property tax shall be referred to as tax on all types of immovable properties, residential, commercial and industrial,…

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November 2018
The Role of Information Communication Technology to Enhance Property Tax Revenue in Africa: A Tale of Four Cities in Three Countries
by William McCluskey, Riël Franzsen , Mundia Kabinga & Chabala Kasese

Information communication technology (ICT) is an important tool to support local governments in their efforts to more efficiently administer property taxes and other own-source revenues. Increasingly, developing countries, including those in Africa, are managing large volumes of data on taxable properties and taxpayers within the ICT environment. With reference to four African cities, this paper…

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How Local Authorities Can Exploit the Potential for Effective Property Taxes: A Case Study of Harare
by Munatswi Nengeze

This paper explores administrative challenges that developing countries face in property tax administration. It is internationally acknowledged that local authorities play a vital role in enhancing a country’s economic growth and provision of public goods. Their activities rely on revenue collection. It is therefore in the public interest and the interest of all governments to…

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Property owners’ knowledge and attitudes towards property taxation in Tanzania
by Merima Ali, Odd-Helge Fjeldstad & Lucas Katera

Property taxation (PT) is high on the political agenda in Tanzania and considered a cornerstone of the Government’s efforts to strengthen broad based direct taxation. Because it is visible to taxpayers, and in principle linked to improved local services, PT holds a unique potential to act as a foundation for bargaining between taxpayers and governments…

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True Values
by Nyah Zebong & Wilson Prichard

Where property markets are still developing, there is little sales data on which to base valuations. As a result, it is more difficult to assign accurate property valuations, there is greater scope for abuse, and these valuations are more likely to be contested.In peri-urban or rural areas where property markets are almost non-existent, a value…

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Practical Guidance Note: Training Manual for Implementing Property Tax Reform with a Points-Based Valuation
by Paul Fish

This paper shares the author’s on-going experience in supporting the implementation of property tax reform programmes in smaller urban centres and rural districts in Sub-Saharan Africa, covering more than 12 local governments over a period of more than 10 years. The paper presents a generic training manual, designed to offer practical guidance for property tax…

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Property Taxation in Kampala, Uganda: An Analytic Case Study on a Successful Reform
by Mihaly Kopanyi & Riël Franzsen

Kampala’s revenue reforms offer lessons that large and powerful cities should not wait for national actions, rather, they can do a lot “in-house” to improve tax administration, coverage, and collection. Against the rather poor performance of the property tax in Uganda, Kampala’s reforms have resulted in unprecedented increase of own-source revenues generally and the property…

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February 2018
Policy implementation under stress: Central-local government relations in property tax collection in Tanzania
by Odd-Helge Fjeldstad, Merima Ali & Lucas Katera

Inter-organisational cooperation in revenue collection has received limited attention in the tax administration literature. Recent experiences from Tanzania offer a unique opportunity to examine opportunities and challenges facing such cooperation between central and local government agencies in a developing country context. The administration of property taxes (PT) in Tanzania has been oscillating between decentralised and…

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January 2018
Taxation, Property Rights and the Social Contract in Lagos
by Tom Goodfellow & Olly Owen

Major taxation reforms over the past decade have been interpreted as facilitating the transformation of Lagos from of a city seen as in permanent ‘crisis’ to a beacon of ‘megacity development’. Most attention has focused on Personal Income Taxation (PIT). Less attention has been devoted to another innovation – the property tax or Land Use…

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October 2017
Urban Fortunes and Skeleton Cityscapes: Real Estate and Late Urbanization in Kigali and Addis Ababa
by Tom Goodfellow

In many parts of Africa, societies that remain primarily rural are experiencing accelerated urban growth and highly visible booms in property development. In the absence of significant industrialization, investment is pouring directly into what Lefebvre and Harvey characterized as the ‘secondary circuit’ of capital. Debates about the drivers of investment in real estate are longstanding…

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Blogs:

March 2019
by Fred Andema, Nyah Zebong & Robert Raikes Mugangaizi

Local governments (LGs) across Uganda have recently been looking for ways to improve yields from their property tax systems. The main reasons for this growing interest are the rapid urbanisation taking place in the country, and the increased pressure from city dwellers for public services. Some property tax reforms have shown success in identification, valuation…

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March 2019
by Alexander Chirambo & Rhiannon McCluskey

Mzuzu is the third largest city in Malawi. Before 2013, it collected very little property tax per year: K50 million ($68,000 USD) on average. However, with the implementation of the ReMoP property tax system, revenues have increased seven-fold to over 350 million in 2018, which has allowed the city to improve services including garbage collection,…

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October 2018
by Nyah Zebong

Property Tax Reform in Senegal In recent years there has been much focus in Africa on adopting forms of taxation that enhance economic growth, but also ensure equitable, stable and sustainable sources of funding to governments. This is true for revenue mobilisation efforts that benefit both national and sub-national governments across the continent. The need…

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Research Projects:

Current Project
Boosting the Enforcement and Collection of Property Rates: Learning from the Experiences of Kampala City Council Authority (KCCA)
Project Researchers: Prof D.J Bakibinga, Makerere University & Dan Ngabarino, Makerere University

This study will evaluate the experience of KCCA in the enforcement and collection of property rates with an objective of understanding some of the reasons why the Authority has been more successful than the rest of the urban authorities and local governments (four of these will be studied alongside KCCA). In particular the study will look into the role of ICTs, improved coordination between KCCA and other government agencies and accountability to tax payers in increasing revenue yields from property rates.

That said, even KCCA still has a number of challenges in the enforcement and collection of the tax. (For the last six years property rates account for only 23% of the Authority’s total revenue) As pointed out above, the authority’s capacity to valuate and locate properties subject to rates is still limited. Similarly, there seems to be utter lack of awareness among the tax payers most of whom do not appreciate the difference between rates and other forms of tax such a rental and property taxes. Due to this, there is often resistance and unwillingness to pay on the part of property owners. The law on property rates is also restrictive in a number of ways. In this regard, the study will incorporate a comparative approach involving a detailed analysis of experiences from at least one other urban authority in the East African region.

Project Outputs

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Current Project
The Relationship Between Local and Central Governments in Property Tax Administration
Project Researchers: Rose Wanjiru, Centre for Economic Governance

The main objective of this research is to examine the collaborations between national and County Governments in property tax administration with the aim of elaborating the policy frameworks and practices; and to articulate the general challenges in Kenya and specifically in Kiambu and Laikipia Counties; and to provide policy recommendations based on the findings.

Project Outputs

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Current Project
Property Tax in African Secondary Cities: Insights from the cases of Kisumu (Kenya) and M’Bour (Senegal)
Project Researchers: Liza Rose Cirolia , African Centre for Cities & James Christopher Mizes, UC Berkeley

This working paper adopts an urban lens on property tax. It focuses specifically on how property tax operates in two African secondary cities, Kisumu (Kenya) and M’Bour (Senegal). The paper identifies three factors shaping the low levels of property tax collection in the two case cities. These are the misalignment between the spatial scale of property tax collection and the utilisation of funds; constrained resources and capacity for collection; and tax administrators’ own perceptions of the legitimacy of property taxation. These factors have tangible effects on the everyday workings of property taxation. The cases also demonstrate that tax administrators make sustained efforts to improve taxation. While the same types of challenges are evident in the cities of Kisumu and M’Bour, how administrators respond reflects the unique and particular context of each place and the perspective of the administrators who work there. This finding confirms that local tax administrators are not simply the recipients of tax policy, but are active agents in shaping how policies operate in practice. Overall, improving property taxation requires interventions to address alignment, capacity, and legitimacy. However, rather than attempting top-down reform, this research suggests that building on the perceptions and practices of tax administrators will offer a more effective pathway to incrementally improving property tax in Africa’s smaller urban centres.

Project Outputs

Working Paper
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Past Project
The Enigma of Central and Local Governments Relationship and the Impact on Property Tax Administration in Ghana
Project Researchers: Fariya Mohiuddin & Frank L. K. Ohemeng

This project is exploring a number of different questions. What challenges do the relationship between the central and local governments pose in property tax administration in Ghana? How has the relationship between the central and local government continued to affect the administration of property tax in Ghana? Why is decentralisation so problematic in Ghana? What is the appropriate role of the central government in supporting the effective administration of property tax by local government? How has central transfer constrained local revenue mobilization and factors impacting on citizens’ compliance behaviour?

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Current Project
The Role that ICT can Play in Improving Property Tax Collection in Africa: Three Case Studies
Project Researchers: Prof Riël Franzsen, African Tax Institute, Prof William McCluskey, African Tax Institute, Dr Mundia Kabinga, University of Cape Town & Chabala Kasese, Zambia Revenue Authority

Africa is rapidly urbanizing. The number of large African cities with populations between 5 and 10 million is also expected to increase, from three to twelve by 2030 (United Nations 2014). However, the fastest-growing urban agglomerations are medium-sized cities and cities with less than 1 million inhabitants. Durand-Lasserve (2016) provides startling projections regarding urbanization stating that between 2015 and 2050 (i.e., in only 36 years) urbanization in Africa will grow from 38 percent to 55 percent, implying an additional 790 million urban inhabitants. This likely population growth will generate a significant increase in the demand for housing, social services and public utilities. It will also require significant infrastructure investment to support business development and to keep these businesses competitive in international markets. This will likely generate an increased demand for property taxation in African urban areas, and for improving the administration of this tax (McCluskey, Franzsen & Bahl 2017).

Globally local governments are under pressure to deliver basic services to their citizens. To fund amenities such as clean drinking water, waste management, adequate power supply and basic healthcare, sub-national/city administrations are under financial stress. The development of an integrated ICT revenue collection system provides the necessary platform to support municipal administration to more efficiently collect property tax and other own source revenues. Given the rapid rate of urbanization, further stress is experienced in many African cities.

As illustrated by recent developments in a number of Tanzanian cities, the development and implementation of an integrated information and communication technology (ICT) revenue collection system can provide the necessary platform to support municipal administration to more efficiently collect property tax as well as other own source revenues.

The main aim of this project is: To evaluate the contribution of Information Communication Technology to improving the collection of property tax revenue within local government.

To support this aim the following research objectives have been identified:
• To critically evaluate the existing body of knowledge in the context of ICT in own source revenue collection;
• To assess the shortcomings of traditional revenue collection methods with a view to identifying operational gaps;
• To evaluate the performance of ICT solutions in collecting revenue in a number of selected case study areas.

Project Outputs

Working Paper
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Past Project
An Analysis of the Relationship Between the State and Councils in Administering the Land Tax in Benin
Project Researchers: Kelly Labart, Bassirou Sarr & Damas Hounsounon

This research is looking into how we can maximise efforts to collect property tax and whether or not councils are better off by delegating this task to tax authorities. If the answer to this question is yes, then ways in which we can encourage the tax authorities to maximise efforts to collect this tax will be addressed. The project with also be looking to uncover the different forms of resistance to the property tax and how these are to be surmounted. What are the political factors in play? How do you ameliorate tax compliance especially with respect to major property owners?

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Understanding the Potential Role of the Property Tax in Addis Ababa
Project Researchers: Gabriella Yolanda Carolini, Fitsum A. Gelaye, Massachusetts Institute of Technology & Tigist K. Temesgen, Addis Ababa University

Urban real estate markets on the African continent are booming with construction and international investment (Bradford, 2014; Davis, 2015; National Association of Realtors, 2016; Salinas, 2013; The Business Year, 2014a, 2014b). A few trends spur this bullish approach to urban Africa real estate. First, demographic estimates for the continent—including urban population growth and the proportion of the youthful population—are widely read as critical indicators of future economic growth (United Nations Economic Commission for Africa, 2017). Africa, along with Asia, hosts the most rapidly urbanizing population – located in small and medium-sized cities, and the continent’s urban population is predicted to triple by 2050 (UN 2015). Second, related to urban population growth, a growing middle class population in a number of countries is expected to boost both demand for services as well as supply, with important consequences for housing and commercial real estate markets (Deloitte, 2011; National Association of Realtors, 2016). Third, from a relative perspective, African luxury real estate in particular is considerably cheaper than other markets in Asia or Latin America (Jansen, 2015), spurring a boom in markets geared toward international investors even while affordable housing for domestic populations remain under-financed (Lall, Henderson, & Venables, 2017). While of course major challenges remain, including the extension and upgrading of critical infrastructure in both urban and rural areas, this picture of urban African real estate markets is increasingly driving international speculation on land and fueling revisions of city futures on the continent (Carolini, 2017; Watson, 2014). This research project seeks to understand how to facilitate wide benefit from this boom in African cities. The central premise of the proposed work is that the distributive potential of Africa’s urban real estate boom depends on the strength of governments to socialize project benefits. Worldwide, the municipal property tax is widely recognized as a critical mechanism that holds the potential to effectively address this distributive challenge.

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