Managing Property Taxation and Supporting Development
Addressing topics on law and economy, the Institute of Law (IoL) at Birzeit University has launched the Birzeit Legal Encounters of 2009/2010 in partnership with the Konrad Adenauer Stiftung (KAS). In cooperation with the Faculty of Law and Public Administration at Birzeit University, IoL hosted Mr. Mahmoud Nofal, Director General of the Property Tax and Valuation Department at the Palestinian Ministry of Finance, to present a lecture on Managing Property Tax and Supporting Development. Moderated by Dr. Ghassan Faramand, IoL Director, the legal encounter brought together a large number of representatives of the private sector, public servants, as well as students and professors at Birzeit University.
In his opening remarks, Mr. Nofal made a brief note on the definition, nature, and historical background of the property tax, as well as relevant laws that regulate property taxation. In the West Bank, property tax has been governed by several laws promulgated by successive political regimes that ruled over Palestine. These include the Law on the Tax of Buildings and Land of 1926; the British Mandate-issued Law on the Land Tax of 1938, which describes in detail the property tax in terms of rights, duties, and tax rates; and the Jordanian Law No. (11) of 1954 Concerning the Tax of Buildings and Land Inside Borders of Municipalities, which repealed the Law on Property Tax in Cities of 1940 and the Law on the Tax of Buildings and Land of 1926. Later, the Jordanian Law on the Land Tax No. (30) of 1955 repealed all previously-promulgated laws relating to land outside borders of municipalities. With varied rates and categories according to the type of land, the latter Law also imposes a tax on all pieces of land located outside municipality boundaries. Mr. Nofal explained that Law No. (11) of 1954 and Law No. (30) of 1955, as well as all relevant Jordanian amendments introduced to them towards 1967 are still in force in the West Bank.
Mr. Nofal stated that the Property Tax Department is one of the public administrations run by the Ministry of Finance. Not only does it collect property tax and valuate land, the Property Tax Department also delivers numerous services to the public. It administers over 70 percent of the West Bank land, which was not covered by the land settlement process. In addition, the Property Tax Department maintains citizens' land tenure by managing the transfer and adjudication of land titles as well as taxpayers' registration certificates necessary to adjudicating land titles and to obtaining construction licences. On the other hand, Land Registration Departments administer the remaining 30 percent of the land area. Whereas Land Registration Departments are only competent of managing the transfer of land titles, the Property Tax Department is entitled of valuating and imposing taxes on land.
Of its primary objectives, Mr. Nofal asserted that the Property Tax Department seeks to safeguard citizens' land titles; renew land registers; increase revenues collated by the property tax and licences of professions; and activate tax collection. The Property Tax Department also works towards launching a comprehensive revaluation of land managed by all old and new municipalities as well as facilitating public service delivery.
With respect to criteria of land valuation, Mr. Nofal made a distinction between valuation of tenure-based buildings and buildings to be hired. In this context, comprehensive valuation is a legal process grounded on principles of justice and equality in tax imposition. To this effect, comprehensive valuation aims to enhance collection of property tax in order to support budgets of municipalities and local councils as well as to help them meet their own needs. Hence, local government authorities will be capable of delivering public services in all social, economic and cultural fields, thereby propelling economic development. To make proper decisions, the public and private sectors, along with the respective authorities, will also be able to form a clear vision and indicator on the volume of investments to be directed to land and buildings.
In conclusion, Mr. Nofal made a presentation on the role the property tax plays in the development process: it contributes to realising a set of strategic objectives, such as financing the public treasure or budgets of local government authorities; attaining tax equity among taxpayers; and redistribution of incomes. Therefore, tax will be levied from financially-solvent persons to be reallocated in the form of services and development initiatives, from which all citizens will definitely benefit.
It should be noted that 140 participants attended the foregoing meeting.
The Legal Encounters Programme is organised in partnership with the Konrad Adenauer Stiftung.
