Assessing the Effectiveness of Property Tax Reforms on Tax Revenue

Abstract

vi ABSTRACT This study intended to assess the effectiveness of property tax reforms in Tax revenue in Tanzania. Where the specific objectives were to assess relationship taxa base of property tax and tax revenue, second to assess relationship between property tax rate and tax revenue in Tanzania and the third was to assess the relationship between registered property tax payers and tax revenue in Tanzania. The study used secondary data from TRA and BOT whereby the time series econometric approach based on ordinary least square (OLS) was used for estimation of the results. Diagnostic test also employed in order to make the variables free from problems associated with the time series. Moreover, quantitative technique was used with the help of E-VIEW and Excel in analyzing data. The analysis was guided by research objectives. The study employed Johansen co-integration test to examine the relationship between the property tax and tax revenue, Vector Error Correction Model (VECM) to check for short-run relationship among the variables and simple linear regression model to check the relationship.The study found that there is positive and significant relationship (5%) 0 between property tax and tax revenue that is increase in tax base, tax rate and number of tax payers will improve the tax revenue and when the tax property decrease also leads to decline of tax revenue. The study recommended that the government should control for tax rate depending on the income of taxpayers so as maintain and increase the number of taxpayers this is through making a favorable tax rate at all tax payer. There should be continuous review on tax property in Tanzania tax system to reflect the current realities of the modern economy since tax property was found to have significant effect on tax revenue. Keywords: tax revenue, property tax (tax rate, tax base and number of registered tax payers)