Assessing taxpayers’ awareness on their right to appeal property tax assessment in the city of Mzuzu – Malawi

• Author: Kaude, P.
• DOI: https://doi.org/10.47348/AMTJ/V2/i1a7
• Published date: 28 March 2022
• Date: 28 March 2022
• Citation: (2022) 2 AMTJ 120
• Pages: 120-137

https://doi.org/10.47348/AMTJ/V2/i1a7 120

ASSESSING TAXPAYERS’ AWARENESS ON THEIR RIGHT TO

APPEAL PROPERTY TAX ASSESSMENT IN

THE CITY OF MZUZU – MALAWI

ÉVALUATION DE LA SENSIBILISATION DES

CONTRIBUABLES DE LEUR DROIT DE FAIRE APPEL DE

L’ÉVALUATION DE LA REDEVANCE FONCIÈRE DANS LA

VILLE DE MZUZU – MALAWI

AVALIAÇÃO DO CONHECIMENTO DOS CONTRIBUINTES

SOBRE O SEU DIREITO DE RECORRER DA AVALIAÇÃO DO

IMPOSTO PREDIAL NA CIDADE DE MZUZU – MALAWI

Prince Kaude*

JEL classif ication: H71, H80

ABSTRACT

Valuation inaccura cy when assessing propert ies for taxation p urposes, which results

in taxpayers de ciding to evade pro perty taxe s due to higher taxe s influenced by

incorrect assessments, a ffects the e conomy of the country negatively. Thi s research

evaluated how a lack of taxpayer a wareness of th eir right to app eal on estimated

property ta xes affect property ta x compliance in Mzuzu City. Qualitative a nd

quantitative dat a were collect ed by administer ing questionn aires while the study

areas were sele cted based on the ir planning natu re and different state in terms of the

income of the dw ellers. Taxpayers were selected random ly and the sample from study

areas was found b y matching the tot al number of ta xable proper ties in the area to

the appropr iate sample size. The study has conf irmed that the majority of ta xpayers

do not take any action if an assessme nt is incorre ct due to a lack of kn owledge of

tax appeal s which often le ads to tax evasion. Consequently, the government need s

to extensively edu cate taxpaye rs on tax appea ls through, for exam ple, radio and

television media.

Keywords: awareness, property tax, tax appeals, tax evasion, valuation

inaccuracy

RÉSUMÉ

L’économi e du pays est négativeme nt affecté e par l’inexactitude de l’évalua tion

fiscale de s propriété s immobilières du e à une mauvaise éva luation ce qui con duit les

contribuables à décider d’évader l a taxe foncière en raison du taux d’impôts trop.

Cette recherche a évalué comment l’ignorance des co ntribuable s de leur droit de faire

appel quant à l’estimat ion de la taxe foncière af fecte l’observation/paiement de la ta xe

foncière dan s la ville de Mzuzu. De s données qual itatives et quantitatives ont été

recueillies à l’aide des qu estionnaires d istribués ta ndis que les zone s d’étude ont été

* Researcher: Compassion Kind Organisation: princekaude5@gmail.com.

(2022) 2 AMTJ 120

© Juta and Company (Pty) Ltd

ASSESSING TAXPAYERS’ AWARENESS ON THEIR RIGHT TO APPEAL PROPERTY

TAX ASSESSMENT IN MZUZU CITY – MALAWI 121

https://doi.org/10.47348/AMTJ/V2/i1a7

sélectionnées en fonction de l eur capacité de planifier ainsi que la dif férence du statut

salarial des h abitants. Les contr ibuables ont été sélectio nnés au hasard et l’échantillon

des zones d’étude a été trouvé e n faisant corre spondre le nombre total des propr iétés

imposables dans la zone à la taille ap propriée de l’échantillon. L’étude a confirmé

que la majorité d es contribuables ne pre nnent aucune mesure si l’évaluat ion est fausse

à cause de l’ignorance d es recours f iscaux en app el ce qui entraine sou vent l’évasion

fiscale. Par c onséquent, le gouverne ment doit intensivement éduqu er les contribuable s

à propos des recou rs fiscaux en appel pa r le biais par exemple de la radio et t élévision.

Mots-clés: sensibilisation , taxe foncière , recours fiscaux en appel , évasion

fiscale , l’inexactitude de l’évaluation

RESUMO

A avaliação in correcta de propried ades para efeitos de impostos, que resul ta na decisão

dos contribuintes de fugir ao paga mento do imposto predial devido a impostos m ais

elevados resulta ntes de uma avalia ção errada, afe cta negativame nte a economia

do país. Esta invest igação avaliou co mo a falta de conhec imento por parte dos

contribuint es do seu direito de re curso sobre a estima tiva do imposto predial a pa gar

afecta o pagame nto deste imposto na c idade de Mzuzu. Foram re colhidos dados

qualitativos e quantitativos através da a dministração de questionários, enquanto as

áreas de estudo fora m seleccionadas com base na na tureza do seu planea mento e

diferente esta tuto em termos de r endimento dos hab itantes. Os cont ribuintes fora m

seleccionados aleatoriam ente e a amostra das áreas de estudo foi enc ontrada fazendo

correspond er o número total d e propriedade s fiscais n a área à dimensão ap ropriada

da amostra. O estudo con firmou que a ma ioria dos contr ibuintes não t oma qualquer

medida se uma avalia ção estiver er rada devido a um des conhecimento do direito

a recurso da avalia ção do imposto, o que freq uentemente c onduz à evasão fiscal.

Consequente mente, o governo nece ssita de educar amplame nte os contribuintes sobr e o

direito de recor rer das estimativas fi scais através, por exemplo, da rádi o e da televisão.

Palavra s-chave: sensibilização, imposto predial, direito de recurso, evasão

fiscal, avaliação incorrecta

I INTRODUCTION

Property valuation var iances and inaccuracies occur in the valuation

profession as no two valuers can arrive at the same conclusion of value

even if such assessments are conducted using the same comparable data

(Eff iong, 2015). Valuation exercises are therefore largely subjective as

it relies on the individual va luer’s judgement (Olofulahan et al, 2016).

Properties may be overvalued or undervalued for t ax purposes which

results in incorrect tax rate charges on properties (Nischke et al, 2017).

On certain occasions, this valuation variation puts tax payers at risk

of paying more ta x than they should. In these i nstances, taxpayers

need to be aware of their r ight to object to property tax so levied.

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