Incidence and Economic Impacts of Property Taxes in Developing and Transitional Countries (original) (raw)

The effect of property tax on wealth accumulation in developing economies

Corporate Governance and Organizational Behavior Review

Wealth accumulation aids in the survival and betterment of disadvantaged households. The majority of African households acquire wealth in the form of properties, which form part of their assets. This study aims to investigate the effect of property tax on wealth accumulation. From 1990 through 2019, the study looks at seven African countries: Cameroon, Eswatini, Madagascar, Mauritius, Morocco, South Africa, and Tunisia. The panel vector error correction model (PVECM) was employed as the econometric technique approach. The variables used in the study are property tax, land wealth, political stability, education, and household income. The findings show that property taxes have a positive and significant relationship with wealth accumulation in the long-run in the seven African countries studied. In the short-run, however, the relationship is negative and statistically insignificant. The study recommends a policy review on land ownership to attain easily landed properties and a reducti...

The Effect of Property Tax on Income Redistribution in Selected African Countries

Sustainability

Tax plays an important role in the redistribution of income, and property tax is no exception. One key area that income redistribution curbs is the area of income inequality, and, statistically, most African countries have a high level of income inequality due to their high Gini coefficient. This study examines the effect of property tax on income redistribution in seven Africa countries from 1990 to 2019. The variables used in the study are property tax, Gini coefficient (proxy for income redistribution), income tax, employment rate, GDP per capita growth, and corruption. The panel autoregressive distributed lag (PARDL) was employed as the econometric technique approach. The findings of the study reveal that property taxes have a positive and significant relationship with income redistribution in the long run in the seven African countries studied. This study recommends the effective administration of property tax. If property tax is effectively administered, it can fulfil its redi...

Urban property taxation in developing countries

1988

The property tax can be an efficient, equitable means of fmancing municipal services in developing countries, but in most countries it needs reform. The Policy, Planning, and Research CompleA distributes PPR Wodking Papers to dissentinate the findigs of wa i progres a nd to encourage the exchange of ideas amng Bank staff and all othen inteaeted in development isues. Thewe papers cay the nam of the authors, reflect only their views, and should be used and cited accordingly. The findings, interpeatias, and conclusionsx aethe authors' own. They should not be auributed to the World Bank, its Boa8d of Direos, it manageent, or any of its manber cmntries.

Intrajurisdictional capitalization and the incidence of the property tax

Regional Science and Urban Economics, 2014

Two views dominate the debate about property tax incidence-the "capital tax" or "new" view, under which the tax distorts capital allocation and is borne primarily by capital owners, and the "benefit tax" view, under which the tax is an efficient user charge. Evidence of both interjurisdictional and intrajurisdictional capitalization of property taxes and public services has been argued to provide compelling evidence for the benefit tax view. This paper focuses on the latter-the intra-jurisdictional capitalization effects that underlie what is arguably the most plausible derivation of the benefit tax view of the property tax. The analysis provides a model in which the capital reallocations that characterize the capital tax view induce intrajurisdictional capitalization effects that are generally similar-indeed, in the benchmark case, identical-to those that arise under the benefit tax view, suggesting that empirical evidence supporting such capitalization effects cannot distinguish between the two views. In addition, the analysis shows that these capitalization effects imply that even under the stringent assumptions of the benefit view, the property tax is not a benefit tax for a propertytax-financed increase in local public services; rather, it only becomes a benefit tax for future home purchasers-after the modeled intrajurisdictional capitalization effects occur.

Taxing Land and Property in Emerging Economies: Raising Revenue…and More?

2010

Recently, many developing and transitional countries have become more interested in land and property taxes. Colombia, for example, is considering a major reform of rural property taxes as part of its attempt to 'reincorporate' parts of the countryside long dominated by various guerrilla and anti-guerrilla forces into the 'normal' governance system (Garzón and Vázquez-Caro 2004). China too is considering the role of land and property taxation in its burgeoning urban areas (Bird 2005). For various reasons and with varying degrees of urgency, property taxation keeps popping up on the policy agenda in countries around the world.

PROPERTY TAXATION, PROPERTY BASE, AND PROPERTY VALUE: AN EMPIRICAL TEST OF THE "NEW VIEW

National Tax Journal, 1993

The "Traditional," "New," and "Benefit" Views of property taxation yield different predictions in regard to the effects of property taxation, An empirical test for evidence on the predicted effects of the New View is given. Results support the New View and indicate that ( '7) the greater the positive differential between a city's rate of property taxation and the nation's average rate, the smaller the amount of capital in the city and the smaller the per-unit market value of its property tax base; and (2) the higher the average rate of property taxation in the country, the lower the return to all property. Simulations regarding revenue alternatives vided.

Revisiting the Excise Tax Effects of the Property Tax

Public Finance Review, 2012

The authors analyze the excise tax effects of a general property tax from the perspective of a small open economy facing a perfectly elastic supply of capital. The model differs from most that have appeared in the literature in the following ways: (1) the property tax is applied in a four-sector model with three taxed sectors-manufacturing, housing, and services, and a tax-exempt agricultural sector. Only manufacturing and agriculture produce tradable goods; (2) the analysis considers an ''intermediate run'' time frame in which labor is perfectly mobile across production sectors but fixed within the jurisdiction, while land is fixed in each sector; and (3) all production sectors use capital, labor, and land. The authors find that the excise tax effects are borne primarily by labor and land. The results also indicate that the degree of backward taxshifting declines markedly in a longer run time frame in which labor is perfectly mobile across jurisdictions.