Can land taxes foster sustainable development?
- Economists argue that land rent taxation is an ideal form of taxation as it causes no deadweight losses. Nevertheless, pure land rent taxation is rarely applied. This paper revisits the case of land taxation for developing countries. We first provide an up-to-date review on land taxation in development countries, including feasibility and implementation challenges. We then simulate land tax reforms for Rwanda, Peru, Nicaragua and Indonesia, based on household surveys. We find that (i) land taxes provide a substantial untapped potential for tax revenues at minimal deadweight losses; that (ii) linear land value taxes tend to put a high relative burden on poor households as land ownership is pervasive; (iii) non-linear tax schemes could avoid adverse effects on the poor; and that (iv) with technological advances, administrative costs of land taxes have reduced substantially and are outweighed by tax revenues and co-benefits of formalized land tenure. Enforcement and compliance remain, however, a key challenge.
Author details: | Matthias KalkuhlORCiDGND, Blanca Fernandez MilanORCiDGND, Gregor SchwerhoffORCiDGND, Michael JakobORCiDGND, Maren Hahnen, Felix CreutzigORCiDGND |
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DOI: | https://doi.org/10.1016/j.landusepol.2018.07.008 |
ISSN: | 0264-8377 |
ISSN: | 1873-5754 |
Title of parent work (English): | Land use policy : the international journal covering all aspects of land use |
Subtitle (English): | An assessment of fiscal, distributional and implementation issues |
Publisher: | Elsevier Science Publishers Ltd. |
Place of publishing: | Oxford |
Publication type: | Article |
Language: | English |
Date of first publication: | 2018/07/14 |
Publication year: | 2018 |
Release date: | 2021/07/19 |
Tag: | Fiscal policy; Land use; Optimal taxes; Public economics; Tax incidence |
Volume: | 78 |
Number of pages: | 15 |
First page: | 338 |
Last Page: | 352 |
Funding institution: | PBL Netherlands Environmental Assessment Agency; Mercator Foundation |
Organizational units: | Wirtschafts- und Sozialwissenschaftliche Fakultät / Wirtschaftswissenschaften |
DDC classification: | 3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft |
Peer review: | Referiert |
Publishing method: | Open Access / Hybrid Open-Access |
License (German): | CC-BY-NC-ND - Namensnennung, nicht kommerziell, keine Bearbeitungen 4.0 International |