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3.9 Remnants of self-declaration systems still exist in Indonesia, the PhilLppines, and some Indian cities. (Calcutta is one.) Turkey and Peru are among the few countries that still rely entirely on it. There, property owners are required to file property declarations with the taxing authority, every three years. Declarations must also be filed when a property changes ownership, or when a building is constructed or improved.

3.10 On the declaration, owners must provide the information required to determine the property's value. In Turkey, owners must provide information on the location, usage, physical measurements, and characteristics of land and buildings. Based upon these characteristics, owners must then calculate the -operty's value, using price factors provided by the taxing authority. (In Turkey, owners have the option or making an estimate below the minimum value, but they pay a penalty if the property is subsequently sold for more than its estimated value.) 3.11 The effectiveness of the self-declaration system depends upon the cooperativeness of taxpayers--on the willingness of all property owners to file full and accurate property declarations--and in practice its difficult to get them to do so. All the countries using the self-declaration system rely, to some degree, on penalties to induce compliance. The legal penalties for failing to declare values, or for underdeclaring them, are often severe. In Taiwan, for example, the taxing authority has the right to acquire any taxable property at its declared value. To be effective, however, these penalties must be credible. But they are not credible because the penalties are rarely imposed. As audits are infrequent, the odds of discovery are small.

3.12 Turkey--the only country reporting even modest success with ownerdeclaration--relies upon a combination of field audits and tax clearances to enforce compliance. The audits' coverage is reportedly broad enough to raise the odds of discovery to credible levels. They are supplemented by a tax clearance system--in which an owner wishing to sell his property must obtain a clearance from the taxing authority before submitting his application to the registrar of deeds. The clearance system, while effective in inducing compliance among owners who intend to sell their property, does not affect owners who do not anticipate selling.

3.13 Use SimRle. Single PurRose Maps. The limited coverage of formal real estate transactions in many developing countries, combined with the administrative difficulties involved in implementing a tax clearance system, limit the applicability of the Turkish experience to other countries.

3.14 By far the most common approach to discovery is the inventory system, where the taxing authority staff goes into the field to obtain the data required to administer the tax. In effect, inventory systems are equivalent to 100% audit under an owner-declaration system. The virtue of this approach is that it permits a field verification. The drawback is its cost.

3.15 From the outset, an inventory system requires a geographical referencing system to ensure that all properties are found and assigned an ineradicable identification code. In industrial countries, this is not difficult. Parcel maps are normally available, either with the taxing authority