Land and Property Taxation to Finance Urban Development in Somaliland: Challenges and Prospects for Reform
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African Tax Administration Paper 37
Despite significant economic growth, particularly in the construction sector, Somaliland faces substantial public infrastructure deficits, which hinder further economic progress and increase business costs. Critical infrastructure needs and the low base of essential public goods provision highlight the need for the government to establish stronger fiscal foundations, particularly at the local level in urban areas. While government revenue collection is low, property and land taxes represent a significant opportunity to raise local government revenue and contribute to sustainable urban development.
This report examines land and property tax systems in Somaliland’s urban municipalities and focuses on the key challenges and reform opportunities to enhance revenue generation. Drawing on reform experiences from other sub-Saharan African cities, the analysis highlights strategies for effective property and land taxation in Somaliland. Emphasising the need for strong political commitment to achieve these reforms, it suggests a way forward for the implementation of progressive tax reform to finance critical urban development and set the foundations for the ambitions of the nation.
Dr Colette Nyirakamana is Research Lead for the LoGRI program, and Senior Research Associate at the Munk School of Global Affairs and Public Policy at the University of Toronto. Her research focuses on local finances, in particular the building of fiscal autonomy in Sub-Saharan African (SSA) subnational governments. She studies the reasons why, despite the significant potential of financial resources, SSA cities fail to raise enough revenue. Colette’s research draws on institutional and political economy theories to show how institutional rules and incentives and local political dynamics create favourable and unfavourable conditions for effective revenue mobilisation. Her research highlights how weak fiscal autonomy limits the capacity of cities to finance public services valued by citizens. She completed her doctoral degree in Comparative Public Policy at McMaster University in Canada.
Vanessa van den Boogaard is a Research Fellow at the ICTD and a Senior Research Associate at the Munk School of Global Affairs and Public Policy at the University of Toronto. She completed her PhD thesis on informal revenue generation and statebuilding in Sierra Leone, and has ongoing research on the topic in the Democratic Republic of the Congo and Somalia. Vanessa leads the ICTD’s new programme on civil society engagement in tax reform and co-leads the research programme on informal taxation.
Warsame Ahmed is the Director of the Research and Community Service Directorate at the University of Hargeisa. His research focuses on the informal economy, governance and state building in Somali East Africa.
Citation: Nyirakamana, C.; van den Boogaard, V. and Ahmed W. (2024) Land and Property Taxation to Finance Urban Development in Somaliland: Challenges and Prospects for Reform, ICTD African Tax Administration Paper 37, Brighton: Institute of Development Studies, DOI: 10.19088/ICTD.2024.083
