From Outdated Valuations to Digital Land Records: IMF Charts The Gambia's Property Tax Future

The IMF says The Gambia could nearly triple recurrent property tax revenue, from 0.15% to 0.9% of GDP by modernizing valuations, expanding property coverage, and strengthening enforcement rather than raising tax rates. The report calls for digital land administration, legal reforms, and better tax governance to boost domestic revenue, improve local public services, attract investment, and reduce long-term dependence on external financing.

The International Monetary Fund (IMF) believes The Gambia is overlooking one of its biggest opportunities to strengthen public finances. While the country's real estate market has expanded rapidly with increasing urbanization and rising land values, its property tax system continues to generate only about 0.3 percent of GDP, far below its estimated potential. According to the IMF's Fiscal Affairs Department and the Global Public Finance Partnership (GPFP), recurrent property taxes collected by Local Government Areas (LGAs) currently contribute only 0.15 percent of GDP. Still, the figure could rise to 0.9 percent of GDP under existing tax rates if the system were modernized. This represents an untapped revenue opportunity of around 0.75 percent of GDP without introducing new taxes or increasing tax rates. Instead, the report argues that better administration, updated property valuations, stronger enforcement, and digital land management could transform property taxation into a major source of sustainable domestic revenue.

Unlocking Revenue Without Raising Taxes

The IMF's assessment makes it clear that The Gambia's challenge is not the absence of taxes but the inability to collect them effectively. Many taxable properties remain outside the tax system, valuation rolls have not been comprehensively updated since 2005, and existing assessments often fail to reflect current market values. Rapid growth in apartments, condominiums, commercial buildings, and mixed-use developments has further exposed weaknesses in legislation that was not designed for today's property market.

The report estimates that current tax collections capture only a small fraction of potential revenues because of outdated valuation methods, incomplete property registration, fragmented legal provisions, and inconsistent enforcement across local governments. By improving property identification, updating valuations, and strengthening compliance, the government could significantly increase municipal revenues while avoiding additional tax burdens on citizens.

A Reform That Goes Beyond Tax Collection

The IMF views property tax reform as much more than a fiscal exercise. Stronger local revenue generation would allow Local Government Areas to finance roads, drainage systems, sanitation services, schools, healthcare facilities, and other public infrastructure with greater financial independence. This would also support The Gambia's Domestic Revenue Mobilization Strategy (2026–2030) and National Land Policy (2026–2035), both of which seek to reduce dependence on external financing and strengthen fiscal decentralization.

One of the report's key recommendations is the nationwide rollout of a Land Information System (LIS) integrated with Geographic Information Systems (GIS) and digital property administration platforms. Such a system would create accurate property records, improve land governance, strengthen ownership documentation, simplify tax administration, and enable electronic billing and payments. Better digital infrastructure would also reduce administrative errors, improve transparency, and support more effective urban planning as cities continue to expand.

The report also recommends allowing local governments to register taxable properties even where formal ownership documentation is incomplete. Rather than delaying taxation until ownership disputes are resolved, authorities should expand the tax base first while strengthening legal processes over time. It further proposes shifting enforcement toward the property itself rather than relying solely on individual owners, thereby making tax collection easier for rented, vacant, or absentee-owned properties.

New Opportunities for Development Partners and Investors

The findings also carry important implications for international development partners. Institutions such as the World Bank, African Development Bank, bilateral donors, and development agencies increasingly emphasize domestic resource mobilization as a foundation for sustainable development. Supporting digital land administration, valuation modernization, GIS infrastructure, institutional capacity building, and legal reforms could help The Gambia finance more of its own development priorities while reducing long-term dependence on donor funding.

The private sector also stands to benefit from a more transparent and predictable property taxation system. Accurate land records and standardized valuations would improve investor confidence, simplify property transactions, strengthen collateral for bank lending, and encourage formal real estate development. Developers, financial institutions, and infrastructure investors generally perform better in markets where property ownership is clearly documented and taxation rules are predictable.

However, businesses should also prepare for more accurate property assessments and stronger compliance requirements. Properties that have historically been undervalued or remained outside the tax system may face higher tax obligations once reforms are implemented. While this may increase costs in the short term, greater transparency and regulatory certainty are expected to create a healthier investment environment over the long run.

Building a Modern Property Tax System for Long-Term Growth

Another major recommendation is replacing the current Stamp Duty framework, which operates under legislation dating back to 1931, with a dedicated Property Transfer Tax (PTT). Unlike the existing system that taxes only selected legal documents, the proposed PTT would tax the transfer of property itself, ensuring that customary transfers, inheritances, gifts, and other ownership changes are included within the tax base. The IMF recommends maintaining a tax rate between 2 and 3 percent, with the possibility of reducing it once recurrent property taxation becomes more effective.

The report also supports introducing taxation on vacant land held for speculative purposes, although it advises a cautious approach. Pilot programs in urban and peri-urban areas should be introduced first, supported by reliable valuation systems, clear legal definitions, and safeguards for vulnerable landowners before nationwide implementation.

Overall, the IMF concludes that property tax reform offers The Gambia an opportunity to strengthen public finances without creating new taxes. By modernizing legislation, expanding property registration, investing in digital land administration, and improving enforcement, the country could unlock substantial domestic revenues while improving local governance, supporting better public services, encouraging more efficient land use, and creating a stronger foundation for long-term economic development. For policymakers, the report provides a practical roadmap for fiscal reform; for development partners, it identifies high-impact areas for technical and financial support; and for private-sector stakeholders, it points to a more transparent and efficient property market capable of supporting sustained investment and urban growth.