Fixing the Property and Land Tax Regime in Developing Countries

1
Fixing the Property and Land Tax Regime in
Developing Countries

• Roy Bahl
• Georgia State University
• FIAS Workshop on Raising Taxes Through Regulation
• World Bank
• Washington, DC
• February 25, 2009.

2
What Does the Property Tax Offer to Developing
Countries?

• Revenue
• Equity, Fairness
• Efficiency

3
What Happens in the Practice in Developing
Countries?

• Little Revenue
• Hard to Tax the Base
• Poor Administration
• Exemptions
• Tax Treatment of Business

4
Table 1. Property Tax as Share of GDP (Percent)
Note The average for the 2000s is for the years
2000 and 2001. Source Calculations in Bahl and
Martinez-Vazquez (2008) based on data taken from
International Monetary Fund (various issues).
5

Where PTc property tax collections PTl
property tax liability AV Taxable assessed
value MV market value
6
Reform Direction

• Focus on Base Broadening
• Limit Exemptions
• Remove Discriminatory Treatment of Business
• Cover All Dimensions of the Administration
• Regular Revaluation
• Unify Property, Land Taxes
• Concentrate on Cities