Academic journal article Public Finance and Management

Property Tax Administration in Francophone Africa: Structures, Challenges, and Progress1

Academic journal article Public Finance and Management

Property Tax Administration in Francophone Africa: Structures, Challenges, and Progress1

Article excerpt

ABSTRACT

In the context of a widespread focus on decentralization in Africa, there exists an imperative to find suitable ways to maximize potential own revenue sources at all sub-national government levels. This need in particular and the need for greater domestic resource mobilization by African states in general, has been exacerbated by the current global financial crisis that has led many countries into recession and left developed and developing countries alike scrambling to find solutions at home. In that regard, it has been widely suggested that property taxes would represent an important, if not the best, source of stable revenue at the subnational level in both developed and developing countries. This paper analyses property tax systems as practiced in some francophone African countries, by identifying major issues and constraints they face; it also explores avenues to strengthen property tax as a source of national and/or municipal revenue.

JEL classifications: H71; H77; H27; O55

Keywords: Property taxation, domestic resource mobilization, fiscal decentralization, land tenure, property market, francophone Africa.

(ProQuest: ... denotes formula omitted.)

1. INTRODUCTION

In the context of a widespread focus on decentralization in Africa, there exists an imperative to find suitable ways to maximize potential own revenue sources at all sub-national government levels. This need in particular and the need for greater domestic resource mobilization by African states in general, has been exacerbated by the current global financial crisis that has led many countries into recession and left developed and developing countries alike scrambling to find solutions at home. Indeed, greater domestic resource mobilization will go a long way toward providing African countries with the means to finance their development agenda without relying excessively on external assistance. At the sub-national government level in particular, it is generally acknowledged that greater revenue autonomy and a broad range of good and adequate revenue sources would allow sub-national governments in Africa to become more accountable to their taxpayers and to provide, more readily and efficiently, improved levels of public services and appropriate infrastructure tailored to taxpayers' preferences. By the same token, this would promote local democracy as well as improve the standard of living in local communities in Africa.

In that regard, it has been widely suggested that property taxation (hereafter referring to real property taxation) would represent an important, if not the best, source of stable revenue at the sub-national level in both developed and developing countries. Property tax is considered a good local tax in the sense that property, particularly land, cannot easily be moved out of the taxing jurisdiction; it is considered fair as long as it is used to finance public services and infrastructure reflecting the needs of local communities; moreover it is highly visible, thereby ensuring accountability and transparency.2 However, if property taxes are an important potential source of revenue, especially at the local government level in many developed and developing countries across the world, it remains true that property taxes accounts for a small proportion of tax revenue in many African countries. To that effect, one author observed that property taxation is "one of the most lucrative . . . yet least-tapped sources of tax revenue to support urban government in Africa" (Mou, 1996 p.6). This is especially true in many francophone countries in Central and West Africa. At this stage, it is important to foreshadow that the reasons that property taxation has not been widely adopted in these countries are the institutional and political concerns that will be discussed in this paper. The desire of the paper is to explore whether these concerns can be overcome.

Specifically, this paper briefly analyses property tax systems as practiced in some francophone African countries by identifying major issues and constraints they face. …

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