Building Fiscal Resilience: Addressing Property Tax Challenges and Opportunities in Lemi Kura Sub-City
Keywords:
Property tax efficiency, compliance, governance reform, fiscal sustainability, Ethiopia
Abstract
This study explores the challenges and strategic opportunities for enhancing property tax efficiency in Lemi Kura Sub-City, Ethiopia. By employing a mixed-methods approach, the research combines quantitative analysis of property tax records from 2014 to 2023 with qualitative insights from structured interviews with key stakeholders, including tax officials and property owners. The findings highlight that local governance structures, legal frameworks, economic conditions, and administrative practices play critical roles in property tax compliance. Regression analysis reveals that government spending transparency and modernized property valuation significantly impact compliance rates, whereas economic volatility presents ongoing challenges. Recommendations include reinforcing legal frameworks, implementing automated valuation systems, and engaging taxpayers through transparent communication strategies. These insights offer practical steps to improve revenue mobilization, supporting fiscal sustainability in Ethiopia’s urban centers.
References
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27. Slemrod, J., & Yitzhaki, S. (2002). Tax avoidance, evasion, and administration. In A. J. Auerbach & M. Feldstein (Eds.), Handbook of public economics (Vol. 3, pp. 1423–1470). Elsevier.
28. Torgler, B. (2003). To evade taxes or not to evade: That is the question. Journal of Socio-Economics, 32(3), 283–302. https://doi.org/10.1016/S1053-5357(03)00040-4
29. Torgler, B., & Schneider, F. (2007). Shadow economy, tax morale, governance, and institutional quality: A panel analysis. CESifo Working Paper Series No. 1901.
30. Ventry, D. J. (2006). The collision of tax and welfare politics: The political history of the earned income tax credit, 1969–99. National Tax Journal, 59(3), 729–746.
31. Wenzel, M. (2005). Motivation or rationalization? Causal relations between ethics, norms, and tax compliance. Journal of Economic Psychology, 26(4), 491–508. https://doi.org/10.1016/j.joep.2004.03.003
32. Zodrow, G. R. (2001). The property tax as a capital tax: A room with three views. National Tax Journal, 54(1), 139–156.
2. Bird, R. M., & Slack, E. (2004). Land and property taxation: A review. World Bank Working Paper No. 0415.
3. Bird, R. M., & Slack, E. (2014). Fiscal decentralization and land policies. Lincoln Institute of Land Policy.
4. Chan, K. H., & Mo, P. L. L. (2000). Tax holidays and tax noncompliance: An empirical study of corporate tax audits in China’s developing economy. The Accounting Review, 75(4), 469–484. https://doi.org/10.2308/accr.2000.75.4.469
5. Chetty, R., Looney, A., & Kroft, K. (2009). Salience and taxation: Theory and evidence. American Economic Review, 99(4), 1145–1177. https://doi.org/10.1257/aer.99.4.1145
6. Dahlberg, M., Mörk, E., Rattsø, J., & Ågren, H. (2008). Using a discontinuous grant rule to identify the effect of grants on local taxes and spending. Journal of Public Economics, 92(12), 2320–2335. https://doi.org/10.1016/j.jpubeco.2008.07.005
7. Fjeldstad, O. H., Schulz-Herzenberg, C., & Sjursen, I. H. (2012). People’s views of taxation in Africa: A review of research on determinants of tax compliance. Journal of African Economies, 21(suppl_2), ii137–ii178. https://doi.org/10.1093/jae/ejr049
8. Franzsen, R. C., & McCluskey, W. J. (2017). Property tax in Africa: Status, challenges, and prospects. Lincoln Institute of Land Policy.
9. Gemmell, N., & Morrissey, O. (2005). Distribution and poverty impacts of tax structure reform in developing countries: How little we know. Development Policy Review, 23(2), 131–144. https://doi.org/10.1111/j.1467-7679.2005.00278.x
10. Goodfellow, T. (2017). Taxing the urban boom: Property taxation and land leasing in Kigali and Addis Ababa. International Development Planning Review, 39(1), 41–63. https://doi.org/10.3828/idpr.2017.3
11. Hassan, S., & Schneider, F. (2016). Size and development of the shadow economies of 157 countries worldwide: Updated and new measures from 1999 to 2013. Journal of Global Economics, 4(3), 1–14. https://doi.org/10.4172/2375-4389.1000218
12. Keen, M., & Lockwood, B. (2010). The value added tax: Its causes and consequences. Journal of Development Economics, 92(2), 138–151. https://doi.org/10.1016/j.jdeveco.2009.01.003
13. Kirchler, E., Hoelzl, E., & Wahl, I. (2008). Enforced versus voluntary tax compliance: The “slippery slope” framework. Journal of Economic Psychology, 29(2), 210–225. https://doi.org/10.1016/j.joep.2007.05.004
14. Loo, E. C., McKerchar, M., & Hansford, A. (2009). Understanding the compliance behaviour of Malaysian individual taxpayers using a mixed-methods approach. Journal of the Australasian Tax Teachers Association, 4(1), 181–202.
15. Luttmer, E. F. P., & Singhal, M. (2014). Tax morale. Journal of Economic Perspectives, 28(4), 149–168. https://doi.org/10.1257/jep.28.4.149
16. McCluskey, W. J., & Franzsen, R. C. D. (2005). An evaluation of the property tax in Tanzania: An untapped fiscal resource or administrative headache? Property Management, 23(1), 43–69. https://doi.org/10.1108/02637470510580578
17. McCluskey, W. J., Franzsen, R., & Bahl, R. W. (2017). Property tax in Africa. Lincoln Institute of Land Policy.
18. McGee, R. W. (2005). The ethics of tax evasion: A survey of international business academics. Journal of Accounting, Ethics & Public Policy, 3(1), 42–52.
19. Moore, M. (2007). How does taxation affect the quality of governance? IDS Working Paper, No. 280, Institute of Development Studies.
20. Musgrave, R. A., & Musgrave, P. B. (1989). Public finance in theory and practice. McGraw-Hill.
21. Oates, W. E. (1999). An essay on fiscal federalism. Journal of Economic Literature, 37(3), 1120–1149. https://doi.org/10.1257/jel.37.3.1120
22. OECD. (2008). Tax compliance and tax morale. OECD Publishing.
23. Piketty, T., & Saez, E. (2007). How progressive is the U.S. federal tax system? A historical and international perspective. Journal of Economic Perspectives, 21(1), 3–24. https://doi.org/10.1257/jep.21.1.3
24. Sandmo, A. (2005). The theory of tax evasion: A retrospective view. National Tax Journal, 58(4), 643–663. https://doi.org/10.17310/ntj.2005.4.02
25. Schneider, F., & Enste, D. H. (2000). Shadow economies: Size, causes, and consequences. Journal of Economic Literature, 38(1), 77–114. https://doi.org/10.1257/jel.38.1.77
26. Slemrod, J., & Bakija, J. (2008). Taxing ourselves: A citizen’s guide to the debate over taxes. MIT Press.
27. Slemrod, J., & Yitzhaki, S. (2002). Tax avoidance, evasion, and administration. In A. J. Auerbach & M. Feldstein (Eds.), Handbook of public economics (Vol. 3, pp. 1423–1470). Elsevier.
28. Torgler, B. (2003). To evade taxes or not to evade: That is the question. Journal of Socio-Economics, 32(3), 283–302. https://doi.org/10.1016/S1053-5357(03)00040-4
29. Torgler, B., & Schneider, F. (2007). Shadow economy, tax morale, governance, and institutional quality: A panel analysis. CESifo Working Paper Series No. 1901.
30. Ventry, D. J. (2006). The collision of tax and welfare politics: The political history of the earned income tax credit, 1969–99. National Tax Journal, 59(3), 729–746.
31. Wenzel, M. (2005). Motivation or rationalization? Causal relations between ethics, norms, and tax compliance. Journal of Economic Psychology, 26(4), 491–508. https://doi.org/10.1016/j.joep.2004.03.003
32. Zodrow, G. R. (2001). The property tax as a capital tax: A room with three views. National Tax Journal, 54(1), 139–156.
Published
2024-09-07
How to Cite
Teklu Kassu (PhD). (2024). Building Fiscal Resilience: Addressing Property Tax Challenges and Opportunities in Lemi Kura Sub-City. Revista Electronica De Veterinaria, 25(2), 371 - 376. https://doi.org/10.69980/redvet.v25i2.1331
Section
Articles
