Congo's Progressive Property Tax Experiment Raised Revenue by 56%

Governments in poorer countries often can't tax the way rich ones do. A progressive property tax — where owners of more valuable homes pay a higher rate — sounds fair, but it is hard to administer where property records are incomplete and enforcement is thin. Many developing-country governments default to flat, proportional rates instead, on the assumption that progressivity would simply cost too much to collect.

A new study puts that assumption to the test. Working with a provincial government in a large city in the Democratic Republic of Congo, researchers randomly assigned different neighborhoods to one of two property tax schedules: a flat rate for everyone, or a progressive one where more valuable properties paid steeper rates. The progressive schedule collected 56% more revenue than the flat one.

The gains came from both ends of the property-value scale. At the top, higher official rates raised more money even though some expensive properties under-complied. At the bottom, lower rates persuaded more owners to actually pay, more than making up for the smaller amount each one owed. People, it turned out, mostly responded to their own tax bill — not to what neighbors paid, or to whether the system felt fair overall. And when the city later paired the progressive schedule with tougher enforcement on high-value properties, the system stopped being regressive in practice.