Property tax is an annual tax paid by landowners to local governments based on the value of real estate properties like houses and land. The key points of the document are: 1. Property tax in Bahir Dar city is levied on land and buildings owned for personal use, not for business purposes. 2. The tax base considers the land area, level/quality, and use to calculate taxes owed. Data on these factors is collected from registered land maps. 3. Taxes are due annually from the start to end of the fiscal year, and late payments face initial 10% penalties increasing to 5% annually. 4. A new city land tax rates schedule bases the tax amount on the

1. Property tax is the annual amount paid by a land owner to the local government or the
municipal corporation of his area. The property includes all tangible real estate property, his
house, office building and the property he has rented to others.
(https://economictimes.indiatimes.com/definition/property-tax)
Property tax is an annual tax on real property. It is usually, but not always, a local tax. It is most
commonly founded on the concept of market value. The tax base may be the land only, the land
and buildings, or various permutations of these factors. For the purposes of this guide, property
tax is restricted to annual taxes and excludes one-off taxes on transfers, on realized capital gains
or betterment, or on annual wealth taxes.
The main property taxation in bahir dar city administration is specifically land and roof tax on
land and house under ownership for personal use not for business purpose.
Currently property tax levied in properties is changing in to lease, this reflects that, in the coming
decades the property tax may totally eliminated from practical implementation.
Tax base in property tax system
Property tax is imposed on property mainly land and building on the land. To tax property there
must be a tax base to calculate tax from it. The tax base is the land holded under ownership in
care meter but also consider level of the land (i.e. level 1, 2, 3…) and function of the land like for
housing and organization. Based on the above three criteria’s we can determine the property tax
on the property.
The information related to the property like level of the land, function and areal coverage will be
collected from the map of the land which is already registered in bahir dar city administration.
Payment period and penalties:
The period of payment to property tax is all days from the beginning of the fiscal year to the end
(from Hamle1-sene30). But if one of the tax payer did not pay the tax, he/she will pay the total
tax amount and 10% as a penalty for the first year and 5% for every year unpaid tax liabilities
after the first year 10% penalty.
Why Tax the Wealthy?
(MIRANDA PERRY FLEISCHER (2017); NOT SO FAST THE HIDDEN DIFFICULTIES OF
TAXING WEALTH; American Society for Political and Legal Philosophy;
https://www.jstor.org/stable/26785955) One common purpose is simply to raise revenue, and
wealthy taxpayers have the most money. But when one looks closely, however, three general
justifications for taxing wealth to fight inequality (other than raising revenue) predominate.

2. 1. Ability to Pay- One common motivation for increasing taxes on the wealthy is to improve
the fairness of the tax system by better tying one’s tax burden to one’s ability to pay.
2. Large Wealth Concentrations Damage Democracy and Hinder the Economy- A second
common justification for taxing the wealthy more heavily is that large wealth
accumulations impede democratic functioning and economic growth.
3. Combatting Dynastic Wealth- A final common justification for taxing wealth—or, more
precisely, for taxing the transfer of wealth—is to prevent “dynastic wealth.” What exactly
that is and why it is bad, however, is somewhat unclear. Some commentators argue that
wealth transfers should be taxed to impede the accumulation of wealth, equating the
buildup of wealth within families with wealth accumulation as such and ascribing to both
the same political and economic harms.
Challenges on practice of property taxation:
 Several characteristics of property taxes have contributed to their declining relative
importance in the 21th
century in Ethiopia specially bahir dar city administration due to
proclamation to change in to lease in the time of transfer, sale and other situations.
Taxpayer Attitude
A third disadvantage is that the property tax is terribly unpopular with voters, and as a result,
politicians are loathing relying too heavily on it. Per dollar of revenue raised, property taxes may
generate more negative reaction than any other levy. There are several reasons for this degree of
unpopularity. One is that the tax is levied on (unrealized) accretions to the wealth of an
individual or a business, and these accretions do not necessarily correspond to income received.
Even without increases in value, the property tax is essentially a tax on the potential income from
holding some form of property (real estate) in the form of opportunity rent or the value of using
one’s own home. The holding of some other forms of property, for example, stocks or other
financial taxes, only gets taxed upon realization. This creates not only special implementation
problems (for example, how to treat those living on fixed incomes) but it also creates a general
hostility towards this tax. The unpopularity of the property tax is also a bi-product of the
judgmental approach to assessment that is taken almost everywhere. A proposed increase in the
tax rate on a tax base that is determined in uncertain or even mysterious ways is bound to
provoke negative reactions. Finally, the tax is unpopular in part because it is so visible. Most
income tax payers are subject to withholding, but even so, may not be able to accurately report
their annual payment. Consumption taxes are paid in small increments, and are often obscured in
the final price of the merchandise. Most could not even estimate the annual amount of VAT that
they may pay. The property tax, on the other hand, is highly visible in that it is usually billed
annually or quarterly, and property owners are much more likely to know exactly what they pay.

3. (Roy Bahl and Jorge Martinez-Vazquez,2007; The Property Tax in Developing Countries:
Current Practice and Prospects; Lincoln Institute of Land Policy Working Paper).
Why Tax the Wealthy?
Which of the foregoing options—if any—that one chooses will reflect one’s motivation for
taxing the wealthy, coupled with an understanding of the practical difficulties of so doing? One
common purpose is simply to raise revenue, and wealthy taxpayers have the most money. Other
times, the desire to tax the wealthy stems from concern about the absolute standard of living of
those at the bottom. This goal, however, is more about fighting poverty (which requires raising
revenue and implementing other tax and other policies that aid the poor) than inequality per se.
Large Wealth Concentrations Damage Democracy and Hinder the Economy. A second common
justification for taxing the wealthy more heavily is that large wealth accumulations impede
democratic functioning and economic growth. Under these views, taxing wealth is akin to taxing
carbon: Both are examples of Pigovian taxes that seek to minimize negative externalities by
taxing the activity generating the externality. MIRANDA PERRY FLEISCHER (2017); NOT
SO FAST THE HIDDEN DIFFICULTIES OF TAXING WEALTH ; American Society for
Political and Legal Philosophy; https://www.jstor.org/stable/26785955

4. Table 1: The new city land tax tariff based on type of service, level of city and level of the land
(Birr per meter care).
No. City
Level
Level of
the land
Residenti
al
commercial Social industry administrative Government
development
organization
NGO’s
1. 1 1 0.17 3.00 2.50 1.00 2.50 2.80 2.30
2 0.12 2.70 2.20 0.90 2.20 2.60 2.10
3 0.08 2.40 1.90 0.70 1.80 2.40 1.60
4 0.04 2.00 1.60 0.60 1.20 1.50 1.50
5 0.02 1.30 1.00 0.40 1.00 1.20 0.90
2. 2 1 0.13 2.70 2.20 0.80 2.00 2.40 2.00
2 0.11 2.40 1.80 0.70 1.80 2.00 1.70
3 0.07 2.00 1.50 0.60 1.40 1.40 1.40
4 0.03 1.70 1.00 0.40 0.80 1.00 0.90
5 0.01 1.20 0.50 0.30 0.60 0.70 0.40
3. 3 1 0.10 2.20 1.80 0.70 1.60 2.00 1.70
2 0.09 1.80 1.40 0.60 1.40 1.50 1.30
3 0.06 1.50 0.90 0.50 1.00 1.00 0.80
4 0.02 1.00 0.50 0.30 0.60 0.70 0.40
5 0.01 0.80 0.30 0.20 0.40 0.60 0.80
4. 4 1 0.08 1.50 1.20 0.50 0.60 1.20 1.00
2 0.07 1.20 0.90 0.40 0.40 0.90 0.80
3 0.05 0.90 0.60 0.20 0.30 0.70 0.50
4 0.03 0.70 0.30 0.10 0.20 0.60 0.25
5. 5 1 0.07 1.00 0.70 0.30 0.50 1.00 0.60
2 0.06 0.80 0.50 0.20 0.30 0.70 0.40
3 0.04 0.60 0.25 0.10 0.20 0.60 0.15
6. 6 1 0.03 0.50 0.40 0.10 0.50 0.50 0.30
2 0.01 0.20 0.15 0.05 0.20 0.30 0.10
Source: ANRS Bahir Dar city administration council; proclamation No. 6/2009E.C.