Building Comprehensive Property Tax Systems in Lower-Income Countries: ‘Cadaster-First’ vs ‘Property Tax First’ Approaches to Reform Property Tax Systems

The foundation of effective property taxation is identifying and addressing all properties. Yet in lower-income countries this continues to pose a major challenge. We argue that this is often the result of inappropriate legal frameworks and institutional structures. Most countries rely on “cadaster-first” approaches requiring that properties be legally registered with national governments before being subject to taxation. This is conceptually intuitive, but has posed often insurmountable barriers to effective administration in lower-income contexts owing to data limitations, high costs, institutional complexity, vulnerability to corruption and misaligned incentives. We demonstrate that outcomes can often be substantially, and rapidly, improved by adopting “property tax first” approaches that allow for simpler, more decentralized, processes of property identification and addressing for property tax purposes that do not rely on formal titling and registration of ownership. We draw on examples from Sierra Leone, the Democratic Republic of the Congo, Senegal, Togo and Zambia.

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