Modelling Improvements to Property Tax Collection: The Case of Addis Ababa

Authors: Gabriella Y. Carolini, Fitsum Gelaye & Kadeem Khan
Publisher: ICTD
Date: January 2020

Abstract:

Working Paper 103

Efforts to reform property tax systems in African cities tend to focus more on how to value properties for purposes of tax assessment than on how to better collect taxes due. The same is true of the literature on property tax reform. There is however reason to believe that a greater initial focus on improving collection would be more productive. In this paper, we explore how this might be done in Addis Ababa. This would involve adopting a principle already employed in several African cities: area-based property valuation. This involves linking the tax assessments of individual properties closely to assessments, neighbourhood by neighbourhood, of the quality and density of the available basic public infrastructure and the quality of the built environment. We demonstrate how to identify and map neighbourhoods for this purpose.