The challenge of property tax collection from commercial properties : a case study of Nansana Town Council

Abstract

The main objective of the study was to examine the various challenges facing the collection of property tax at Nansana Municipal council as a case study. The objectives that guided the study included; to identifying the current trend and performance of property tax collection; to identify the factors affecting compliance levels on property tax collection; and to suggest strategies to improve compliance and effectiveness of property tax collection at Nansana Municipal council. A cross sectional study design was adopted for the study. A self-administered questionnaire was used to collect data from the respondents. The findings on current trend and performance of property tax collection showed that taxpayers did not know why they should pay property tax, there was unequal treatment of taxpayers, property tax rate was too high for taxpayers, there was wastage and corruption in the council was high and taxpayers did not know how to calculate their own property tax among others. The findings showed that the challenges affecting the effective collection of property tax included but not limited to high cost of tax administration, lack of ownership identification, insufficient number of employees with the requisite skills, proper and adequate facilities, irregularity of tax billing, unfavourable property tax collection procedure, lack of political will to enforce penalties, absence of adequate and quality data about the tax base and taxpayers and high levels of illiteracy among taxpayers. From the findings, the suggestions to improve compliance and effectiveness of property tax collection proposed were regular training of taxpayers on property tax collection, information exchange between the council and public should be effective, feedback on taxpayers’ queries be provided in a timely manner, monitoring and evaluation of property tax collection and collective participation of top management in property tax collection among others. It can be concluded that more still needed to be done to strengthen the collection of property tax so as to overcome the challenges faced by the council in the collection of the tax. Therefore, the study recommends that the management of council should train tax collectors, sensitize taxpayers, develop taxpayer database and emphasis on effective communication.