Local government finance
Resourcing local government remains a central challenge to effective decentralisation. This section has content relating to different models of fiscal decentralisation, options for identifying new sources of local revenue, such as local property tax; and strategies for improving collection and deployment of own-source revenue. It also offers information about improving the borrowing potential of local government, innovative financing models such as municipal bonds, shared services, and public private partnerships.
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Taxing property in a neo-developmental state: The politics of urban land value capture in Rwanda and Ethiopia
Of the African states experiencing sustained growth and poverty reduction in recent decades, Rwanda and Ethiopia stand out due to the scope of their development visions and relatively effective state-driven transformation, leading them to be compared to the East Asian ‘developmental states’. This article argues that these two states are better conceived as ‘neo-developmental’ due to important differences in the international and national constraints they face compared with the East Asian ‘tigers’. One effect of these differences is the difficulty of attracting investment into manufacturing industry, and the consequent concentration of capital in high-end urban real estate. This underscores the need for effective land value capture and property taxation, which featured strongly in the East Asian cases. Currently, however, both Rwanda and Ethiopia lack effective mechanisms for capturing the value of urban property in a way that is sustainable, redistributive and developmental. The article explores the politics of efforts to introduce property tax in both cases. It argues that property taxation has been obstructed by conflicting imperatives on land reform and tax reform, alongside resistance from vested interests created by the rapid generation of real estate-based wealth in the absence of other sufficiently lucrative investment options.
Author: Tom Goodfellow Publisher: African Affairs Publication year: 2017
Central-Local Government Roles and Relationships in Property Taxation
Should central or local governments be responsible for collection and administration of property taxes? There is great variation in practice across the continent, but one particularly significant divide is that between francophone and anglophone countries. The former commonly adopt centralised systems, while the latter usually decentralise key aspects of property taxation such as collection and administration. This divide has its roots in different modalities of colonial rule, but was exaggerated through the trend towards decentralised governance that took hold in the 1990s, supported by Anglo-American development assistance. However, a number of anglophone African countries have attempted to partially reverse fiscal decentralisation since the late 2000s particularly with respect to collection of the tax. International debate is increasing about which level of government should tax property, but currently there is little by way of an evidence base on the relative benefits of each approach. This policy brief explores some of the strengths and weaknesses of decentralised versus centralised approaches, the incentives they create for government authorities to collect the tax, and some of the political challenges of rearranging central-local relations. It suggests that the question of whether to centralise or decentralise the tax as a whole oversimplifies the problem. Property taxation is made up of a number of distinct processes, some of which may be better situated at national or local government level depending on the context. Before disaggregating property taxation into its key constituent elements, some common general arguments for taxing property at a local versus central level are considered.
Author: Tom Goodfellow Publisher: International Centre for Tax and Development Publication year: 2017
Determinants of property rate default: evidence from the Ashanti Region, Ghana
Author: Dadson Awunyo-Vitor, Eric Oduro Osae, Sterling Donani Publisher: CLGF/University of Technology, Sydney Publication year: 2015
Constraints on property rating in the Offinso South Municipality of Ghana
The potential of property rate has been least tapped by decentralized governments in Ghana. This paper investigates the property rating system in Ghana through a case study of Offinso South Municipality (OSM). Questionnaires were used to gather empirical data from property owners in the municipality. The paper finds that there is inadequate property tax administration system and high public disdain for the property tax in OSM, with a significant association between compliance with the property tax and land use regulations in OSM. The paper suggests that the Offinso South Municipal Assembly (OSMA) should improve its land use planning system to facilitate voluntary compliance with the property tax. OSMA should also address accountability and transparency problems in the property tax system in order to increase public confidence in the tax regime. The OSMA should also improve on the property tax collection modes by computerising the billing and collection processes.
Author: Nicholas Addai Boamah Publisher: University of Technology Sydney Press Publication year: 2014
Mobilising sustainable local government revenue in Ghana: modelling property rates and business taxes
Author: Samuel B Biitir, John K Assiamah Publisher: CLGF/University of Technology, Sydney