have great potential (McIlhatton et al. 2012), there are few examples in the developing world where property taxes have been successfully implemented (Franzsen and McCluskey 2017; McCluskey et al. 2012).

Using the example of Kigali, we demonstrate how remotely sensed imagery can significantly reduce the cost of establishing and updating tax registers by allowing automated generation of building footprints and, based on building heights, an estimate of total built-up area. If data on land prices are available, this information, together with spatial data routinely available from statistical institutes, can be used to inform routine processes of computer-assisted mass appraisal (CAMA).<sup>1</sup> Imputed values for land and property from the CAMA model, together with administrative records on taxes collected on individual properties, allows us to provide information on (i) potential revenue gains from full collection of current lease fees; (ii) likely yields from and incidence of a uniformly applied 1% tax on residential land and property; and (iii) the implicit cost of exemptions currently being discussed by Rwandan policy makers. This could not only make collection of property taxes much easier but also ground the debate on tax reform by providing more reliable data on which to base scenarios.

For Rwanda, three findings stand out: first, only about 40 percent of the potential yield of US$4.9 million from current lease fees is collected, suggesting that more efficient collection could heighten returns. Efforts to reduce costs of compliance (e.g., automated billing or reminders) may thus have high returns even in Rwanda, where all properties have been mapped. Second, because lease fees are regressive, moving to a 1% value-based tax would not only spread the tax burden more equally but could also increase revenue to about US$19.3 million—almost 10 times what is currently collected. Finally, while there may be scope for exempting those at the very bottom, the exemptions for ‘low-cost housing’ currently proposed by policy makers are too generous: they would leave only 5% with any building tax obligation.

Defining built-up area based on building footprints and heights derived from remotely sensed imagery offers even more scope to ensure complete coverage in places where recent urbanization implies that tax rolls are no longer current. Combined with transparent valuation models and broad publicity, it could help municipalities to not only generate sustainable own-source revenue but also to gradually reduce reliance on transfer taxes, which in many places seem to be a major reason that land registries revert to informality.

In what follows, section 2 discusses the challenges confronted by cities, how recurrent taxes on land and property can help resolve them, the technical and political economy obstacles to implementing them, and the resulting priority given to using instruments to collect taxes that are less efficient and more distortionary. It describes property taxation in Rwanda, noting similarities to and differences from what can be observed elsewhere. Section 3 describes use of remotely sensed information to construct a map of built-up areas that

> 1 In most countries, such information may need to be collected in surveys or from institutions, such as bank data on mortgage lending. As the only African country to have established a complete and fully digital registry of rights, Rwanda has price data available.

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