Summary and Way Forward

Abstract

“While the world has changed rapidly, the tax systems that support all levels of governments have largely stayed the same”. The quote from David Brunori (2003: 114) is largely right with regard to the overall BRICS tax systems, but not with regard to the property tax within the megacities. It seems as if there is a bottom-up movement originating from the megacities to adopt their own-tax system in order to meet their financial needs, which is expressed in property tax reforms across the megacities. These megacities are in particular facing changing economic and social environments. The megacities are in a state of constant flux—not only with regard to their population numbers, the quantity and quality of public amenities to be provided, and resulting complexity in service delivery, but also with regard to their property tax systems. In such a changing world, the fiscal framework provides megacities ideally with access to revenue sources that correspond with the powers and functions they are responsible for. Local public finance, more precisely, local public taxes, should link urban costs and benefits. However, finances often lag behind and have thereby a negative impact on the financial sustainability of municipalities, on the reliability and quality of municipal services, and municipalities’ contribution to supporting economic growth. In an urbanizing world, public finance is more important than ever before. Herewith, local tax systems, and especially property taxation, has to be in line with the changing local environment in order to offset the financial burdens megacities are facing. Therefore, reviewing the property tax systems in order to further evolve the local tax system is of urgent need.