Critical Elements of Sustainable Property Tax Implementation and Reform David Magor OBE IRRV (Hons) Chief Executive Institute of Revenues Rating and Valuation

Elements of the Delivery Model The last thirty years has seen dramatic economic shifts in transition countries. These movements have been supported by numerous missions financed by various donor agencies and countries. This paper seeks to set out the case for a “template” which draws out the critical elements of sustainable property tax implementation and reform. The intention is for the template to build upon the excellent work delivered over the last thirty years in numerous countries It is a further step on the route to developing standards that will provide consistency in the outcomes delivered in projects concerning the use of land and property taxes in financing sub national government. Active host country involvement is a key element of any delivery model

The Institutional and Economic Setting The need to understand the democratic and legislative processes in the country having particular regard to political will and timelines. The need to understand the legislative setting and the content of any current statutes and subordinate powers This study must recognise that in some developing countries and those in transition they may not be agile in terms of governance. Consideration should be given to a planned transition in any new or modified tax regime. This is particularly important where there may be taxpayer resistance. The need for an understanding of the economic drivers in the country.

The Situation Report The nature of existing property and land taxes The purpose of property and land taxes, is it revenue mobilisation to finance sub national or national government, fiscal decentralisation or some other purpose The quality and coverage of the tax base The complexity of the tax structure and the yield from those taxes The quality of the tax administration in terms of human and physical resources and cost The public acceptance of the tax The compliance regime and the quality of its performance

The Incidence of Fraud and Corruption Is an integrated Fraud and Corruption Strategy across all spheres of Government in place and how is this assessed in terms of efficacy? Has a fraud and corruption risk assessments been conducted? If yes, has a risk register been created? Is intelligence gathered on incidents of fraud and corruption across Government? Has the issue of conflicts of interest been addressed and is there an assessment of supplier and employee relationships? Is the link between fraud and corruption recognised and is the impact on service delivery quantified? Is there a structured and integrated assessment of “fraud and corruption health”? Is there a clear understanding of the incidence of general tax avoidance and evasion.

Other Specific Elements of the Delivery Template (1) Modelling Impact assessment Effective project management The tax base The taxpayer Exemptions Administration

Other Specific Elements of the Delivery Template (2) Communication Taxpayer education Tax propaganda Consultation Post implementation review Peer review

In Conclusion Country specific Deliverable Consistency Quality Sustainable