The feasibility of taxing urban vacant land as a way to increase on revenue for infrastructure development in urban areas

Abstract

The research investigated the feasibility of introducing an urban vacant land tax in urban areas in Uganda specifically focusing on Kyanja Parish, Nakawa Division to raise revenue for local urban authorities and support infrastructure development. Utilising a mixed research design and GIS tools including high-resolution satellite imagery from Google Earth Pro, the study identified and digitized vacant plots within a 100-meter buffer around Kyanja Parish. The analysis revealed approximately 794.89 acres of vacant land across 491 independent urban voids with a distribution favouring the outskirts of the division. Small-scale agricultural voids were the most dominant comprising 442.72 acres (≈55.7%) while open shrub and medium-scale residential categories accounted for about 16.3% each. Residential uses collectively represented 25.0% of the total land, with educational and bare-ground uses uses being minimal. The market value of the vacant land was assessed using a value zone system with Kyanja Parish graded as a valuation zone at a flat rate of UGX 1.5 billion per acre as obtained from the valuers from the Office of the Chief Government Valuer. This valuation allowed for the calculation of total tax potential drawing comparisons to Tunisia’s unbuilt land tax which is set at 0.3% of market value. A study by Yuan, Connoll, & Bell (2009) explains how Tunisia implements this tax and the revenue obtained from it. Projections indicated that the urban vacant land tax could generate approximately UGX 2.2 billion from Kyanja Parish alone representing about 4% of total property rate collection for the financial year 2023/24 and 1.9% of total revenue collection. The findings suggest that while the vacant land tax may contribute modestly to overall property tax receipts, its implementation could promote efficient dland use reduce and reduce speculative holding. The research emphasizes the need for clear legislative frameworks, improved administrative capacities and regular updates of urban cadastres through remoted sensing.