Subnational and Property Tax

While policymakers and academics have increasingly given attention to national-level taxation in developing countries, local government taxation has remained relatively neglected. Yet local taxes have broad and direct impacts on citizens in low-income countries and are likely to have important implications for small business growth, local service delivery, equity, governance, and accountability. Property taxes are of particular interest, as they have significant revenue potential and are non-distortionary, progressive and easily linked to public services – but are nonetheless severely underused in almost all developing countries. Our research aims to build a more extensive body of empirical research on the potential reform of subnational and property taxes, with an emphasis on political economy challenges and cross-country comparison.

Publications:

Local Government Property Tax Administration and Collaboration with Central Government: Case Studies from Kenya
by Rose Wanjiru, Anne Wanyagathi Maina & Eldah Onsomu with Graeme Stewart-Wilson

Property taxes are an important revenue source for subnational governments. Across sub-Saharan Africa collection of property taxes is made up of several distinct processes, some situated at the national level, and some at the local level. Thus, inter-organisational cooperation and institution-based trust are essential for the successful implementation of property taxation. Because of the common…

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April 2019
Local Government Property Tax Administration and Collaboration with Central Government: Case Studies of Kiambu, Laikipia and Machakos Counties, Kenya
by Rose Wanjiru, Anne Wanyagathi Maina & Eldah Onsomu with Graeme Stewart-Wilson

Property taxes are a major source of revenue at sub-national levels in most countries, but their administration is complex, and in most cases the process involves both national and sub-national governments. In Kenya, county governments have legislative authority to levy property taxes and the responsibility to finance some of the cost of the services they…

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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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January 2019
Property Tax in African Secondary Cities: Insights from the Cases of Kisumu (Kenya) and M’Bour (Senegal)
by Liza Rose Cirolia & James Christopher Mizes

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…

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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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September 2018
Does Fiscal Decentralization Enhance Citizens’ Access to Public Services and Reduce Poverty? Evidence from Côte d’Ivoire Municipalities in a Conflict Setting
by Tiangboho Sanogo

Fiscal decentralization has been implemented in many countries with an explicit objective of improving public service delivery and reduce poverty. However, its effectiveness in achieving these goals are much debated and the empirical literature has mostly focused on poverty reduction using cross-country analysis. This paper analyses whether, and how, the devolution of revenue raising responsibilities…

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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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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:

Past 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…

Project Outputs

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Past 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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Past 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…

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…

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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…

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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…

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