Land and Property Tax: A Policy Guide
Property and Infrastructure development in Shanghai, China. Photo Š UN-HABITAT/Julius Mwelu
Administrative issues 11) Make it convenient for taxpayers to pay the tax. The tax should be payable in installments and at multiple locations convenient to the settlements. 12) Spend the tax revenue collected in informal settlements in those settlements. There must be a clear connection between the taxes paid and improvements in services and infrastructure within the settlement. Taxpayers need to see the value they receive for the taxes they pay. 13) Work with community groups to establish spending priorities within the settlements.
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It has been observed that “the major cause of concern [in implementing a property tax in informal settlements] is not so much informality itself, but the way public officials treat informality and how they administer a property tax system�(Smolka and De Cesare, 2006, pg 19). To be sure, informal settlements present challenges, but when quality administration and political will combine, the annual LPT can be an important tool in both regularizing and improving conditions in such settlements.