DDP 740. Roy Kelly and Zainab Musunu. "Implementing Property Tax Reform in Tanzania." February 2000. 28 pp.

Countries in East Africa are undertaking a variety of local government reform efforts aimed at improving local service delivery and economic governance. In addition to rationalizing central-local fiscal relations, these governments are placing attention on improving financial management and revenue mobilization efforts. One key reform priority is improving the role of the property tax as a source of dependable local own-source revenue.

Tanzania embarked on its property tax reform in 1993, following a "valuation-pushed" implementation strategy that focused priority on creating a property valuation roll for Dar Es Salaam (DSM). Phase One of the reform was completed in 1996, producing a valuation roll covering about one third of all properties. The DSM City Commission established in 1996 used this new valuation roll to generate significant increases in the property tax, along with major increases in all locally-generated revenues.

This paper analyzes the current Tanzanian property tax reform to identify possible lessons for refining and improving the property tax reform implementation strategy. Part One provides a brief background of the legal and administrative framework for the property tax in Tanzania. Part Two focuses on the specific property tax reform experience in Dar Es Salaam while Part Three concludes with lessons and recommendations.

Keywords: Tanzania, Africa, property taxes, property valuation, local government finance, tax reform, revenue mobilization

JEL Codes: H71, R51, H29

Dr. Roy Kelly is an Associate at the Harvard Institute for International Development, specializing in public finance, fiscal decentralization, and local government finance. He is currently serving as a senior resident advisor with the Ministry of Local Government in Nairobi, Kenya. Comments can be sent to rkelly@hiid.harvard.edu.

Ms. Zainab Musunu is the National Property Tax Coordinator for the Urban Sector Rehabilitation Project (USRP) for the Government of Tanzania. She served as the city valuer for Dar Es Salaam City Council from 1983-1998.

The authors would like to thank the Lincoln Institute of Land Policy for providing funding assistance making this research possible. The various opinions and conclusions contained in this paper belong to the authors in their personal capacity and do not necessarily reflect the official views of their respective institutions or the Lincoln Institute of Land Policy.