DDP 753. Roy Kelly. "Property Taxation in East Africa: The Tale of Three Reforms." February 2000. 17 pp.

Countries in East Africa share a common British heritage yet have distinct property tax policy structures. The tax base, assessment basis, and the tax rates vary considerably. Tanzania taxes only buildings, Uganda taxes both land and buildings, while Kenya taxes only land. Despite these differences, each faces similar problems of weak administration. Tax base coverage is incomplete, valuation rolls out of date, collection rates low, enforcement virtually nonexistent, and taxpayer service poor.

This paper examines the property tax reforms in East Africa. Part One discusses the major policy distinctions, highlighting differences in the tax base, assessment basis, and tax rates. Part Two presents a revenue potential model that emphasizes the importance of administrative improvements in coverage, valuation, and collection. Part Three provides a brief summary of the three ongoing reforms from the "valuation-pushed" strategy initiated in Tanzania and Uganda in the early 1990s to the "collection-led" strategy recently adopted by Uganda and Kenya. The paper summarizes with four lessons for effective property tax reform.

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

JEL Codes: H29, H71, R51

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

This paper was presented at the National Tax Association’s 92nd Annual Conference on Taxation, October 24-26, 1999, Atlanta, Georgia. The author would like to thank the Lincoln Institute of Land Policy for providing funding assistance making possible this research and my participation at the conference.