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Urban property tax reform : guidelines and recommendations


  • Dillinger, William


The property tax is a potentially attractive means of financing municipal government in developing countries. As a revenue source, it can provide local government with access to a broad and expanding tax base. At present, however, yields of urban property taxes in developing countries are extremely low. In part, these low yields reflect failures in the administration of the tax. Procedural improvements alone, however, are unlikely to have a significant, sustained impact on property tax yields. This suggests that the scope of reform must be expanded to address the systems for rate setting and revaluation, and the incentives confronting administrators of the tax. The scope of reform may have to include the entire structure of local finance. Judging from recent experience, providing local government with complete autonomy over tax policy and administration does not always guarantee that the tax will be exploited effectively. Under these conditions, property tax reform can only be achieved in the context of wider restructuring in the sources of municipal revenue. By reducing the extent of arbitrary subsidies between jurisdictions and confronting local taxpayers with the cost of the services they consume, these reforms are consistent with the pursuit of the efficiency objective that is the principal justification for property tax reform.

Suggested Citation

  • Dillinger, William, 1991. "Urban property tax reform : guidelines and recommendations," Policy Research Working Paper Series 710, The World Bank.
  • Handle: RePEc:wbk:wbrwps:710

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    Cited by:

    1. Roy Kelly, 2014. "Implementing sustainable property tax reform in developing countries," Chapters,in: Taxation and Development: The Weakest Link?, chapter 10, pages 326-363 Edward Elgar Publishing.
    2. Roy Bahl, 1999. "Implementation Rules For Fiscal Decentralization," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper9803, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    3. Richard M. Bird, 2006. "Taxing Land and Property in Emerging Economies: Raising Revenue...and More?," International Tax Program Papers 0605, International Tax Program, Institute for International Business, Joseph L. Rotman School of Management, University of Toronto.
    4. World Bank, 2000. "Thailand : Public Finance Review," World Bank Other Operational Studies 14508, The World Bank.
    5. Strassmann, Paul & Blunt, Alistair, 1993. "Land, Income, Mobility and Housing: The Case of Metro Manila," Philippine Journal of Development JPD 1993 Vol. XX No. 1-d, Philippine Institute for Development Studies.
    6. World Bank, 2004. "India : Fiscal Decentralization to Rural Governments," World Bank Other Operational Studies 14674, The World Bank.
    7. Richard M. Bird, 2015. "Fiscal Decentralization and Decentralizing Tax Administration: Different Questions, Different Answers," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1509, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.


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