_Revenue assignment, competition, and capacity building._ Efforts to make property taxation more transparent and increase revenue may encounter opposition from stakeholders, including politicians, whose time horizon is short and accountability weak. In Brazil, local politicians failed to take advantage of a free national program to update the cadaster and increase property tax revenue by some 10 percent on average if they feared that doing so would jeopardize their chances of re-election (Christensen and Garfias 2020). Revenue from property taxes was particularly low in municipalities with high levels of inequality where affluent individuals lowered their tax liability by blocking efforts to increase capacity or bribing officials (Hollenbach and Silva 2019). In Colombia, property was systematically undervalued in municipalities where large landlords were influential even though this was associated with lower provision of local public goods and ultimately growth (Sanchez-Talanquer 2020).

As a local tax, revenue from property taxes should accrue to local bodies. If local governments lack capacity to administer such taxes transparently, better tax administration can possibly improve tax collection (Basri et al. 2019) as demonstrated in France (Breuillé _et al._ 2018), Canada (Feir _et al._ 2023), India (Awasthi _et al._ 2020), Mexico (Larreguy _et al._ 2018), and Africa (Tourek _et al._ 2020).

Beyond improving the scope for local revenue collection, generation of a comprehensive tax map and land valuation could have political benefits by (i) providing the basis for a reduction of transaction taxes that would remove a key obstacle to keeping property registries up to date; (ii) allowing for a more realistic land use plan land and increasing the effectiveness with which public services will be provided (including by improving the informational basis for subcontracting and monitoring private sector delivery); (iii) reducing the transaction cost in land markets by publishing valuations and using them as an objective benchmark for payment of compensation in case of compulsory land acquisition, for example, for infrastructure construction; and (iv) using the information generated by tax maps and evidence of property tax payment to open up a low-cost path toward recognition of landownership rights.<sup>12</sup>

# **3. Property taxation in the Ukrainian context**

As market-based valuation is impossible without a market for land and real estate, this section first describes Ukraine’s journey towards a market for agricultural land. Valuation methods have not yet caught up with these advances, resulting in a disconnect that risks distorting of private and public land use and services in ways that impede effective decentralization and reduce efficiency, equity, and resilience. By mandating recording of purchase prices, land market reforms have, however, provided the basis for a more flexible approach to property valuation and the use of such values in multiple contexts.

> Scartascini 2019). Appeals to civic duty had limited effect (delCarpio 2015) even if they included information about neighbors’ compliance levels, and making delinquency more visible increased compliance only for small debts (Perez-Truglia and Troiano 2018). 12 For example, in Peru, expected land value increments from titling even informal slum land, if adopted jointly with land taxation, are argued to allow implementation of a titling program that would be fully self-financing (Hawley _et al._ 2018).

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