A citywide field experiment finds that a progressive property-tax schedule raised more revenue than a proportional schedule, while enforcement shaped who ultimately bore the burden.
Research question
Can statutory tax progressivity expand fiscal capacity in a low-income setting, and how does enforcement affect effective progressivity?
Method & data
A citywide field experiment in a large Congolese city randomized neighborhoods to progressive or proportional property-tax schedules, with cross-randomized information treatments and a later citywide scale-up.
Main finding
The abstract reports higher revenue under the progressive schedule. Lower rates increased compliance among lower-value properties, while targeted enforcement among high-value properties was needed to align effective rates with the statutory schedule.
Why it matters
The results separate the revenue effect of a progressive schedule from the administrative work required to make the realized burden progressive.
What to verify
The public abstract does not state how the result would transport to other cities or tax administrations.
Show public abstract used for this summary
Progressive taxation is central to high-income countries' tax systems, but developing countries typically rely on less progressive instruments. We study the introduction of progressive property taxation in a large Congolese city through a citywide field experiment conducted in partnership with the provincial government. Neighborhoods were randomly assigned to a progressive or a proportional schedule. The progressive schedule increased revenue by 56% relative to the proportional one. Gains occurred throughout the property value distribution: at the top, higher statutory rates mechanically raised revenue despite modest compliance losses; at the bottom, lower rates induced compliance gains large enough to offset lower liabilities. Cross-randomized information treatments show that taxpayers responded primarily to their own rates, not to others' rates or to the perceived fairness of the overall schedule. Effective tax rates – taxes paid as a share of property value – declined with property value and were most regressive under the progressive schedule. However, after a progressive schedule was scaled up citywide in subsequent years, targeted enforcement among high-value properties reversed this pattern, aligning statutory and effective rates. Together, the results suggest that progressive property taxation can raise fiscal capacity in low-income settings and, when paired with targeted enforcement, further shift the tax burden onto wealthier property owners.