城市物业税改革 Urban property tax reform : guidelines and recommendations

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http://www-wds.worldbank.org/external/default/main?pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000178830_98101901485350
source: econ.worldbank.org



EXEUIVE SUMMARY

1.    The property tax is a potentially attractive means of financing municipal
government in developing countries.   As a revenue source, it can provide local
government with access to a broad and expanding tax base.   In contrast to the
mix of intergovernmental grants and indirect taxes that now dominate municipal
revenues, it can also promote broader efficiency objectives, linking the
provision of municipal services more closely to their financing and rationing
the consumption of municipal services by price.
2.    At present, however, yields of urban property taxes in developing countries
are extremely low. Although the tax is ubiquitous- -virtually all market economy
developing countries assign a property tax to their municipal governments--its
contribution to total public sector tax. revenues is negligible, and its share
of municipal revenues is typically less than 20%.

Procedural Reforms

3.    In part, these low yields reflect failures in the administration of the
tax. A large proportion of properties are missing from the tax rolls, properties
on the tax rolls are inaccurately valued, and collection efficiency is extremely
poor.
4.    To an extent,  these administrative failures can be addressed through
procedural reforms:
Coverage can be improved by changing the system used to discover and
identify property, from one relying on owner-declarations to one based on
rudimentary tax maps;
Valuation accuracy can be improved through the use of "mass appraisal"--
a simple, formula-driven valuation method that minimizes reliance on the
judgment of valuers and the honesty of taxpayers;
Collection efficiency can be increased by establishing a system of
collection monitoring that more readily identifies major delinquents, and
by using tax clearances to enforce payment.

Policy and Institutional Reforms
5.    Procedural improvements alone, however, are unlikely to have a significant,
sustained impact on property tax yields.   Unless tax rates are also increased,
the absolute level of property tax liabilities will remain low. Unless a system
for annually adjusting valuations (or tax rates) is introduced, inflation will
rapidly erode the real value of tax liabilities. And unless the disincentives
confronting the agencies responsible for administering the tax are addressed,
procedural improvements in coverage, valuation, and collection will not be
sustained.
6.    This suggests that the scope of reform must be expanded to address the
systems for rate setting and revaluation, and the incentives confronting
administrators of the tax.


7.    Given the diversity of institutional  arrangements  used  in property
taxation, the definition of relevant targets will vary.   Recent experience,
nevertheless, provides general rules:
a. Rate seting. In principle, there is no 'right" rate of property tax.
If the property tax is functioning as a price for municipal services, the
"right" rate is the rate that reflects local preferences.   But the
multiplicity of agencies with veto power over property tax policy
introduces a downward bias in rate setting.  Central government's veto
power over property tax policy is particularly suspect, as it derives no
revenue from the tax.  Control over tax policy should, in general, be
exclusively assigned to the entity most directly affected by it--municipal
gover-ment.
b.  Indexation.  Indexing valuations can help maintain the real level of
property tax revenues during periods of inflation. Because the property
tax is imposed on a presumptive basis, tax valuations do not increase
automatically with rising prices.   To maintain the real level of tax
liabilities, taxing authorities must either revalue annually or increase
nominal tax rates. Annual field revaluations, however, are too expensive,
and annual tax increases are too politically controversial.   Countries
accustomed to inflation address this problem by adjusting valuations "from
the office," on the basis of a common inflation indicator. This solution
should be more widely adopted.
c. Administrative incentives. If central government is responsible
administration of the tax, its characteristic indifference to performan,
of the tax can be addressed by changing the terms on which it provides this
service.  Placing the tax administration agency on a paid, contractual
basis provides it with a direct financial interest in performance of the
tax.

Changing the Structure of Local Revenues
8.    The scope of reform may have to include the entire structure of local
finance.   Judging from recent experience, even providing local government with
complete autonomy over tax policy and administration does not guarantee that the
tax will be exploited effectively. For all its economic virtues, the property
tax carries a high political price. Its effectiveness in confronting taxpayers
with the cost of municipal services gives it an unusually high political profile,
within the tax structure characteristic of developing countries. As a result,
where local authorities have access to less efficient but more politically
acceptable revenue sources, these tend to be exploited first.
9.    Under these conditions, property tax reform can only be achieved in the
context of wider restructuring in the sources of municipal revenue.   Clearly,
the objective of such reform is not to increase property tax revenues, per se:
high property tax revenues are not an end in themselves. But in reducing the
extent of arbitrary subsidies between jurisdictions and confronting local
texpayers with the cost of the services they consume, these changes are
consistent with, and necessary to, the pursuit of the efficiency objective that
is the principal justification for property tax reform.