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Many urban local authorities in developing countries are failing to cope with the
increasing demand for urban infrastructure and other social services resulting from
urbanization. Insufficient locally generated finance is one among the reasons
accounting for this failure. Real property tax is often identified as a major source of
local government finance that has the potential to contribute substantially to locally
raised revenue. This thesis reports on results of a study whose aim was to assess
property tax compliance practice in Morogoro Municipality, Tanzania.
The study analyses the public awareness in property tax, methods of land and
building valuation, level of social services on property tax payer, property tax rate
paid to the municipality, and evaluation of property registration on Municipality
level. This is the better way to illustrate how property taxation is practiced. From the
property taxpayer’s point of view the study explores property owners’ perceptions of
property tax. Property owners’ views were collected from Ward and Mitaa of
Morogoro Municipality.
The methods used in data collection were observation, interview and questionnaire.
Collected data were analyzed using Ms Excel and statistical package for social
sciences (SPSS), data presentation was based on tables and figures shows
frequencies and percentages.
Finding of the study shows that property tax generates very low levels of revenue
when measured against the potential. This is a result of inadequacies in
administration of the tax. Property tax coverage is low as large proportions of the
property tax base are not valued and less revenue is collected from rateable
properties captured in the property tax database. The study further observes
inadequacies of non-supportive relationship among the key actors in property
taxation. Property taxpayers express resistance to paying their tax bills on account of
receiving little benefit or none in return for the taxes they pay. The observed
deficiencies with the property taxation practice call for the urgent attention of the
relevant municipal authorities if the property tax is to achieve the full potential. |
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