Does Progressivity Raise Tax Capacity? Experimental Evidence from the D.R. Congo

Progressive taxation is central to high-income countries' tax systems, but developing countries typically rely on less progressive instruments. We study the introduction of progressive property taxation in a large Congolese city through a citywide field experiment conducted in partnership with the provincial government. Neighborhoods were randomly assigned to a progressive or a proportional schedule. The progressive schedule increased revenue by 56% relative to the proportional one. Gains occurred throughout the property value distribution: at the top, higher statutory rates mechanically raised revenue despite modest compliance losses; at the bottom, lower rates induced compliance gains large enough to offset lower liabilities. Cross-randomized information treatments show that taxpayers responded primarily to their own rates, not to others' rates or to the perceived fairness of the overall schedule. Effective tax rates – taxes paid as a share of property value – declined with property value and were most regressive under the progressive schedule. However, after a progressive schedule was scaled up citywide in subsequent years, targeted enforcement among high-value properties reversed this pattern, aligning statutory and effective rates. Together, the results suggest that progressive property taxation can raise fiscal capacity in low-income settings and, when paired with targeted enforcement, further shift the tax burden onto wealthier property owners.