The Impact of Property Taxation in the Provision and Maintenance of Infrastructure (mainly local roads) in Formal and Informal Settlements, Dar es Salaam

Cities in Sub- Saharan Africa is facing challenges in providing new infrastructure and maintaining the existing one due to urbanization trend. Although, sustainability growths of the cities require local authorities to have funds to provide efficient basic infrastructure and services, insufficient finances has been a major obstacle for local authorities in Sub Sahara Africa as the results the number of informal settlements are growing with inadequate basic infrastructure services like waste management, local roads, surface water drainage systems and portable water. Property tax is among the main tools of land value capture in Sub - Saharan Africa region for financing local governments in the provision of infrastructure and services. This thesis gives the outcomes of a research whose goal was to explain the impact of property taxes in provision and maintenance of infrastructure mainly local roads in formal and informal settlement in Dar es salaam City. A case study strategy was adopted. The study is an explanatory and a single embedded, it researches Dar es Salaam city with the focus on two settlements that is Mbezi Beach formal settlement and Makongo Juu informal settlement. The analysis of property tax revenue collected, allocation and cost of road construction and maintenance was done. This is the better way to explain to what extent property tax collected is adequate provision of infrastructure services. The views from taxpayers were explored, in order to know their perceptions on property tax in two settlements i.e. Makongo Juu and Mbezi Beach in Dar es Salaam. The findings reveal that residents in both settlements are paying property tax as per laws administering the same in the country. The legal and institutional set up does not distinguish collection as well as use of property tax between the formal and informal settlements. Nevertheless, despite the fact that those who live in informal settlements, in this case Makongo Juu comply more with payment of the tax as compared to those living in Mbezi Beach which is a formal settlement; the formal areas have been given more attention in terms of infrastructure provision and maintenance as compared to informal areas. Moreover, the taxes collected from formal and informal settlements are not sufficient to meet the expenditures related to road provision and maintenance due to use of outdated valuation rates, exemptions, poor law enforcements for non compliance, as well as lack of proper collection strategies. Apart from that, there is greater awareness of the rights and obligations to both the tax payers and the Municipal officials as they both showed that there is a relationship between property taxation and service provision, of which the practice proved to be different especially in the informal settlements. Therefore, based on the discussions it suffices to conclude that property taxation in Tanzania does not influence much on provision and maintenance of infrastructure mainly local roads in the informal and formal settlements.