Property taxation in Tanzania is one among sources that the government can potentially and largely use to widen its tax base and increase revenue collection. Being directly visible to taxpayers, by design it is relatively easier from the taxpayers’ perspective to easily link the collected revenue to improved provision of local services. Thus, property tax has a prospective to act as a basis for bargaining between taxpayers and governments over revenue collection and public spending, hence increasing the tax compliance rate (Ali, Fjeldstad and Katera, 2018).
Despite this revenue potential, the amount collected from it is far less than what could potentially be collected. Essentially, property tax in Tanzania is narrowly applied only to buildings. Land fees, for a small fraction of planned (and often urban based) plots, are collected through a system of annual land rents administered through the Ministry of Lands. Practically, rural property is not taxed under the Local Government Authorities (Rating) (Collection of Property Rates) Regulations of 2019, and further, non-surveyed rural land is not even required to pay land rent. This implies that a large portion of potential revenue from rural property is untapped by the government.
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