The long-anticipated property tax law has officially been ratified, despite apprehensions voiced by some parliamentarians regarding its potential impact on low-income residents. This significant legislation, which has been under discussion for several years, is designed to provide municipalities with a stable revenue stream essential for funding community development projects.
When the proclamation was presented for ratification on January 14, concerns were raised by certain Members of Parliament. They argued that the new tax measures could disproportionately burden low-income households and individuals on fixed incomes, suggesting that the financial strain would be felt more by these demographics than by businesses.
Supporters of the proclamation point out that it has been nearly a decade in the making, with extensive analysis and deliberation leading to its formalization as a draft bill over the past two years. Experts have emphasized that the timing of this legislation is crucial for enhancing urban infrastructures and ensuring the equal distribution of resources among urban populations.
The government aims to utilize tax revenues tied to rising property values to cover the costs of ongoing investments in urban infrastructure. One of the notable features of this law is its nationwide applicability, alongside provisions allowing regional states the flexibility to develop their own property tax regulations that suit local circumstances. This adaptability is expected to empower municipalities to secure robust financial resources that can be directed towards infrastructure and development initiatives, similar to models successfully implemented in various other countries.
As specified in the proclamation, property taxes will be assessed based on 25% of the property’s value, with tax rates established between 0.2% to 1% for land and from 0.5% to 1% for structures.
Despite a relatively narrow tax base, it has been highlighted that the government currently struggles with effective revenue collection from economic activities. To address this issue, the government has initiated several programs in partnership with international entities to improve revenue generation and expand the tax base. By introducing the property tax, particularly in urban regions, the administration aims to enhance resource mobilization efforts crucial for financing future development projects.
Through this new law, it is hoped that municipalities will benefit from a reliable source of funding to support essential services and infrastructure, ultimately fostering sustainable urban growth.
