This book presents a new approach to recurrent property taxation based on occupancy, size, and location, that will strengthen local governments. Reflecting on the concept of “beneficial property taxation” first proposed by Alfred Marshall, the political economy constraints faced by traditional property taxation are examined and compared with evidence for beneficial property tax seen in China, Mexico, and sub-Saharan Africa. The benefits of this form of taxation are highlighted in relation to the financing of local public services and infrastructure that are required for sustainable development.
This book provides a policy-oriented look at property taxation that engages with the sustainable development goals and lay the foundations for a post-pandemic recovery. It will be relevant to researchers and policymakers interested in development economics and the governance of taxation.
Author(s): Ehtisham Ahmad, Giorgio Brosio
Publisher: Palgrave Pivot
Year: 2022
Language: English
Pages: 173
City: Cham
Preface
Contents
List of Figures
List of Tables
Introduction: Growing Importance of Beneficial Property Taxation in a Post-pandemic World
The Case for Property Taxes, the “Wicksellian Connection,” and Alfred Marshall’s Beneficial Property Taxes
Land Value Capture
Area-Based Taxation
Making a Beneficial Recurrent Property Tax Work
Administering a Property Tax
Structure of the Volume
Chapter 1: Property Taxation, Instruments, Models, Administration, and Potential Effects
1 Typology of Property Taxation
1.1 Recurrent Property Taxation
1.2 Non-recurrent Taxation
2 Defining the Recurrent Property Tax Base—Value or Area/Location
2.1 Value-Based Taxes
Tracking Ownership and Values
Cadasters or Registers with Complex Ownership Patterns
Difficulties of Recurrent Property Taxation: Valuation
2.2 Area-Based Approaches
Area Only
Area and Location
2.3 Comparing the Models
Economic Efficiency
Administration Costs
Growth of Revenue
Transparency/Obfuscation
Equity
3 Dismal Revenue Collections from the Property Tax in Emerging Market Countries
4 Rate Setting, Local Accountability, and Other Advantages
5 Ability to Pay and Benefit Approaches and Assignment of Property Taxation
6 International Experiences: Resilience of Area-Based Taxes and Shifting to Simpler Beneficial Property Tax Options
6.1 The Evolution of the English Model Toward Beneficial Property Taxes
7 Other International Experiences of Property Taxes and Political Resilience of Area-Based Systems
7.1 Israel
7.2 Bengaluru (India)
7.3 The Czech Republic
7.4 Colombia
7.5 Turkey
7.6 Gabon
References
Chapter 2: Failure and Promise of Property Taxation in Senegal
1 Informality, Sustainable Growth Hubs, and Property Taxes
2 Property Tax Collections and Potential
3 The Case of Saint Louis
4 The Sustainable Growth Agenda
References
Chapter 3: Challenges of Property Taxation in Tanzania
1 Property Taxation in Tanzania: General Features
1.1 Land Tenure Regime
1.2 Property Tax
1.3 Land Rent Fees
1.4 Own-Taxes and Intergovernmental Transfers
2 City of Ilala
3 Experiments in Mwanza
4 Conclusions
References
Chapter 4: Financing Sustainable Local Spending and Infrastructure in China
1 Chinese Practices for Taxing Property
1.1 The Land Sales/Value Capture Model
1.2 Taxation of Property Sales and Business Properties
1.3 Alternate Options for Recurrent Taxation of Properties and Local Own-Source Revenues
2 Simulating a Beneficial Property Tax for China
2.1 The Data
2.2 What Does the Data Tell Us About the Six Cities?
2.3 The Political Economy Constraints
2.4 The Simulations
3 Implementing a Beneficial Property Tax in Guangzhou
4 The Next Steps in Property Tax Reforms in China
References
Chapter 5: Mexico: Failure of the Traditional Property Tax and Proposed Beneficial Property Tax Alternative
1 Overview of the Property Tax
2 Problems
3 Causes of These Problems
3.1 Incentives
3.2 Past Efforts and Their Shortcomings
4 Options for Reform
4.1 Reduce Reliance of Municipalities on Bailouts
4.2 De-politicize Collection: Administration and Auditing by SAT or Independent Agency
4.3 Allow Municipalities to Set the Rate Without Approval of the State Legislature
4.4 Economic Incentives Through Improved Transfer Formulas
5 Toward a Beneficial Property Tax in Mexico
6 Some Lessons from the Sub-national Tax Reform Agenda
6.1 The Role of Fiscal Equalization in the Sustainable Employment Generation Agenda
References
Chapter 6: Administration of Property Taxes
1 Limits of Colonial “Tax Collector” Administration
2 Viable Approaches for Emerging and Developing Countries
2.1 Self-Assessment Together with a Modern Tax Administration
3 Tax Administration Options for Arms’ Length Operation of Local Taxes
3.1 Registration
3.2 Valuation
3.3 Collection
3.4 Enforcement
3.5 Bill Delivery and Taxpayer Services
4 New Technology: Blockchain Options
4.1 What Is Blockchain?
4.2 Digital Tools of Blockchain
4.3 Building a Blockchain
Blocks
Nodes
4.4 Applying a Blockchain
4.5 Features and Strengths of Blockchain
5 Types of Blockchain
6 Blockchain and Land Surveying, Registration, and Taxation
References
Chapter 7: Toward a Beneficial Property Tax Agenda for Sustainable Growth
References
Annex Table 1 Detailed structure of property taxation in selected countries
References
Index
