Understanding the Potential for Property Tax Reform in Zambia

Abstract

Reforming Zambia’s property tax system has significant potential to transform the country’s local government finances. This policy brief draws on the findings of a diagnostic assessment conducted by LoGRI to identify the main binding constraints to improved property tax performance and suggests several policy reforms to help achieve that goal. The diagnostic assessment identifies incomplete property discovery, costly and opaque property valuation, and rigid and expensive rate-setting processes as the main binding constraints that, if addressed, could yield sustained improvement in outcomes. To help overcome these challenges, Zambian policymakers could delink property taxation from local planning, enable automated valuation models to simplify and expedite property assessment, delegate more property tax responsibilities to local councils, and improve the flexibility and efficiency of rate-setting processes. The challenges facing Zambia’s property tax system are not unique. The findings of this case study will therefore be useful for policymakers in other countries interested in enhancing the capacity of their own local governments to collect more revenue in a more equitable manner.