Property Taxation in East Africa

Countries in East Africa share a common British heritage yet have distinct property tax policy structures. The tax base, assessment basis and the tax rates vary considerably. Tanzania taxes only buildings, Uganda taxes both land and buildings, while Kenya taxes only land. Despite these differences, each faces similar problems of weak administration. Tax base coverage is incomplete, valuation rolls are out of date, collection rates are low, enforcement is virtually non-existent, and taxpayer service is poor.

This paper examines recent property tax reforms in East Africa. Part One discusses the major policy distinctions, highlighting differences in the tax base, assessment basis, and tax rates. Part Two presents a revenue potential model that emphasizes the importance of administrative improvements in coverage, valuation and collection. Part Three provides a brief summary of the three ongoing reforms from the “valuation-pushed” strategy initiated in Tanzania and Uganda in the early 1990s to the “collection-led” strategy recently adopted by Uganda and Kenya. The paper concludes with four lessons for effective property tax reform.