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:

January 2020
Modelling Improvements to Property Tax Collection: The Case of Addis Ababa
by Gabriella Y. Carolini, Fitsum Gelaye & Kadeem Khan

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…

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November 2019
Simplifying Property Tax Administration in Africa: Piloting a Points-Based Valuation in Freetown, Sierra Leone
by Kevin Grieco, Abou Bakarr Kamara, Niccoló F. Meriggi, Julian Michel, Wilson Prichard & Graeme Stewart-Wilson

The current method of property valuation in Freetown, Sierra Leone is highly inaccurate and generally regressive, as it does not take subjective property characteristics that are major determinants of value into account. The newly elected Mayor Yvonne Aki-Sawyerr made revenue mobilisation a central pillar of her ‘Transform Freetown’ agenda. As a means of achieving this,…

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September 2019
Enhancing Property Rates Administration, Collection and Enforcement in Uganda: The Case of Kampala Capital City Authority (KCCA) and four other Municipalities
by David Bakibinga & Dan Ngabirano

Uganda embraced decentralisation as a system of governance in the early 1990’s. The success of decentralisation was pegged on the capacity of the local governments to mobilise their own revenues in order to fulfill their responsibilities. Before its suspension in 2005 and eventual abolition in 2008, graduated tax constituted a dominant source of local revenue….

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Enhancing Property Rates Administration, Collection and Enforcement in Uganda: The Case of Kampala Capital City Authority (KCCA) and four other Municipalities
by David Bakibinga & Dan Ngabirano

Uganda was among the first African countries to embrace a decentralised system of government in the 1990s. The objective of this policy was to bring services closer to the people while at the same time enhancing local participation and democracy. The success of decentralisation was, however, greatly dependent on the amount of funds and other…

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The Role of Information Technology to Enhance Property Tax Revenue in Kenya, Tanzania and Zambia
by William McCluskey, Riël Franzsen, Mundia Kabinga & Chabala Kasese

Public finance theory suggests that property tax is an ideal local tax. But it’s also a ‘data-hungry’ tax, making it difficult and costly to administer properly— especially at the local government level where capacity, skills and resources are often lacking. Given its high data demands, property tax administration lends itself to the application of modern…

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January 2019
Policy Implementation Under Stress: Central-Local Government Relations in Property Tax Administration in Tanzania
by Odd-Helge Fjeldstad, Merima Ali & Lucas Katera

Purpose 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…

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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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Blogs:

November 2019
by Abou Bakarr Kamara, Graeme Stewart-Wilson, Julian Michel, Kevin Grieco, Niccoló Meriggi & Wilson Prichard

Across sub-Saharan Africa, ineffective property valuation presents a serious hurdle to strengthening local property taxes. Between January and August 2019 the IGC and ICTD co-piloted a simplified approach to property valuation in Freetown, Sierra Leone, that combines both surface area and easily-observable characteristics to arrive at an estimate of market value. The pilot, which built…

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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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Research Projects:

Current Project
Compliance, Accountability and the Social Contract: Studying the Impacts of Property Tax Reform in Freetown, Sierra Leone
Project Researchers: Wilson Prichard, Niccolo Meriggi, IGC, Julian Michel, UCLA & Kevin Grieco, UCLA

This research programme seeks to address four overlapping questions through a combination of (a) randomized controlled interventions in the reform programme, (b) exploiting discontinuities in the implementation of reform to identify causal impacts, (c) systematic tracing of the impact of the reform programme on popular attitudes and behaviours, and (d) the mapping of compliance data…

Project Outputs

Blog
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Current Project
The Collateral Effects of Evictions on Property Tax Morale: Class, Preferences and Signals from the State
Project Researchers: Lily Tsai, Leah Rosenzweig & Nicole Wilson

How do government actions toward the poor influence other citizens’ perceptions of the government? Does making citizens aware of forced evictions – used by the government in the name of development – reduce their willingness to invest in the capacity of the government by paying taxes? We seek to build upon our 2018 pilot survey…

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Current Project
Learning from Successful Reform in Sierra Leone
Project Researchers: Graeme Stewart-Wilson & Wilson Prichard

Graeme Stewart-Wilson will be working with researchers and tax authorities in Sierra Leone to document and derive lessons from ongoing and relatively successful reform efforts. He will be writing up at least two case studies – one related to reform efforts at the National Revenue Agency, led by long time ICTD partner Samuel Jibao, and…

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Current Project
Bringing Property Owners into the Tax Net in Senegal
Project Researchers: Justine Knebelmann, Paris School of Economics, Victor Pouliquen & Bassirou Sarr

The IMF and World Bank revenue statistics show that, between 2000 and 2012, property taxes represent on average of 0.1 to 0.2% of GDP in Sub-Saharan Africa (0.1% in Senegal). In OECD countries, the average range is between 2-3% of GDP. This poor performance suggests considerable scope for improvement. In Senegal, as in most developing…

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Current Project
Direct and Network Effects of Tax Enforcement: Experimental Evidence from the D.R. Congo
Project Researchers: Dr. Augustin Bergeron, Harvard University

How do states in a low-tax, low-capacity equilibrium spur citizens to start paying taxes? This experiment would examine the direct and network effects of an increase in tax enforcement by the government on tax compliance. We partner with the Provincial Ministry of Taxation and randomly assign firms in the city of Kananga, DRC, to one…

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Past Project
Developing Points Based Valuation for Property Taxation in Senegal and Sierra Leone
Project Researchers: Nicolas Orgeira & Wilson Prichard

The African Property Tax Initiative (APTI) has increasingly been approached by governments in sub-Saharan Africa interested in exploring simplified approaches to property valuation for property taxation. This interest grows out of ICTD research which has demonstrated the efficacy of this approach and several secondary cities in Africa, and which has more generally argued for the merits…

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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…

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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.

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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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