In many lower-income countries, where property taxes could provide a significant source of revenue for cities grappling with growing populations, cities often face limited capacity to effectively enforce tax collection. This constraint hinders their ability to fund and deliver essential local services. In Kampala, property taxes levied on buildings – are the single largest component of own source revenues, accounting for over 38 per cent of local revenues in 2019/20.
However, compliance with this tax is low in cities in many low-income countries, and Kampala is no exception. Only 12 per cent of billed properties paid their rates on time in 2019/20, resulting in only 34 per cent of potential revenue being raised.
In this context, we study the impact of a common policy tool aimed at raising tax compliance: public disclosure of tax behaviour. The effect of such policies in low compliance settings is not well understood, but despite mixed evidence on the effectiveness of public disclosure policies, many governments use these kinds of ‘shame’ or ‘honour’ lists to try to promote tax compliance.
Summary of Working Paper 208.
