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Measuring the potential for property taxation in Dakar, Senegal


Abstract: Property taxes are in theory easy to enforce in their simplest form due to their tangible tax base, and are considered an equitable means to raise revenue in low-income countries. In spite of these features, African countries, where cities are growing at an unprecedented pace, are raising only 2 percent of fiscal revenue in property taxes, against around 9 percent in OECD countries, and this figure is at 0.3 percent in Senegal. Focusing on Dakar, the capital city where real estate has been buoyant over past decades, we document the extent and nature of the property tax gap. Using administrative and survey data, as well as satellite images and property valuation methods, we estimate that less than 20 percent of property owners are in the tax net, and that only 9 percent of tax potential is being collected. This weak performance is put into historical perspective using colonial archives. Finally, we compare the observed distribution of the tax burden with the theoretical one under full compliance, and find that weak enforcement leads to a tax profile that is more regressive than what is provided for in the legal framework. These results reinforce the justification for reform and modernization of the property tax management system.


Justine Knebelmann, Paris School of Economics, EHESS, Victor Pouliquen, University of Oxford, Bassirou Sarr, EHESS, Denis Cogneau, Paris School of Economics, IRD, EHESS, and Marc Gurgand, Paris School of Economics, CNRS, ENS

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