Strengthening Local Revenue Mobilization: The DGI-Benin and LoGRI Collaborative Initiative for Property Tax Reform

Effective mobilization of domestic revenue plays a crucial role in financing development initiatives and reducing reliance on external financial aid. In pursuit of this goal, the Directorate General of Taxation (DGI) in Benin has launched comprehensive initiatives to enhance the tax-to-GDP ratio and generate more revenues, particularly for local governments. Within these initiatives, special emphasis is placed on property taxes due to their significant revenue potential. A 2023 study conducted by the DGI unveiled that only 6.35% of Benin’s property tax potential is currently realized.

As the primary central government agency overseeing property tax administration, the DGI-Benin is actively implementing a program to reform the Single Property Tax (TFU). This involves measures targeting property identification systems, valuation, and simplification of payment systems. To support these reform efforts, the Local Government Revenue Initiative (LoGRI) is collaborating with the DGI-Benin, focusing on three key areas: (1) providing technical support to the DGI-Benin in mobilizing local taxes, with a particular emphasis on property taxes; (2) leveraging research to inform the design of property tax reform programs and optimizing broader local revenue mobilization through in-depth analysis, diagnostics, and pilot studies; (3) offering guidance and assistance to the DGI in reforming Benin’s property tax system, along with the formulation of an effective and suitable tax policy.