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Implementing Property Tax Reform in Tanzania

Roy Kelly and Zainab Musunu 

February 2000, English

Countries in East Africa are undertaking a variety of local government reform efforts aimed at improving local service delivery and economic governance. In addition to rationalizing central-local fiscal relations, these governments are placing attention on improving financial management and revenue mobilization efforts. One key reform priority is improving the role of the property tax as a source of dependable local own-source revenue.

Tanzania embarked on its property tax reform in 1993, following a “valuation-pushed” implementation strategy that focused priority on creating a property valuation roll for Dar Es Salaam (DSM). Phase One of the reform was completed in 1996, producing a valuation roll covering about one third of all properties. The DSM City Commission established in 1996 used this new valuation roll to generate significant increases in the property tax, along with major increases in all locally generated revenues.

This paper analyzes the current Tanzanian property tax reform to identify possible lessons for refining and improving the property tax reform implementation strategy. Part One of this paper provides a brief background of the legal and administrative framework for the property tax in Tanzania. Part Two focuses on the specific property tax reform experience in Dar Es Salaam, while Part Three concludes with lessons and recommendations.