Resource information
This study has at its origin the land
question in Paraguay, namely that land ownership is highly
concentrated and has become a source of social conflict in
the rural areas where one-half of the population lives. A
central thesis of the study is that the existing patterns of
land use and ownership, in particular, the very large land
holdings (Zatifundio), are a reflection in part of the
almost insignificant land tax that is charged today on rural
properties. Although the property (land) tax is governed by
national legislation, it is collected by the municipalities,
which are constitutionally autonomous from the central
government. The study thus examines municipal finances in
Paraguay and estimates the revenue potential of a revised
property tax. The study also reviews the economic rational
for effective land taxation and the international experience
in this regard. Finally, it suggests improvements in
municipal financial administration that are needed in
general and, in particular, to administer a revamped and
more effective land tax.
