It is hard to hide a house in an offshore account or conceal it from the tax authorities. That is precisely why, in developing countries, governments pay close attention to property tax. “Real estate cannot be hidden from the tax administration, which makes it an ideal tax,” explained Bassirou Sarr, chief of staff at Senegal’s Ministry of Finance and Budget.
With debt amounting to nearly 119% of its gross domestic product (GDP), according to Barclays Bank estimates, the most indebted country in Africa must urgently increase its tax revenue. Property tax holds significant potential. In Senegal, property tax generated only 0.3% of state revenue, compared to 2% in sub-Saharan Africa and about 6% in member countries of the Organisation for Economic Co-operation and Development (OECD). As in other developing countries, authorities had focused on taxes from large businesses, small and medium-sized enterprises (SMEs) and finally on employees in the formal sector – taxes that are easier to collect.
“Land issues are highly sensitive politically because many occupants do not have formal property titles,” added Justine Knebelmann, an economist at Sciences Po. A new software program piloted in Dakar since 2021 could change the situation. Between 2021 and 2024, it tripled tax compliance in covered areas and generated several million euros in additional revenue.
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