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supplementary valuation is spotty; owners who escaped the five-year valuation could well be
overlooked for five years.
Most of the 55 cities and municipal and other councils with the legal authority to collect rates
have no personnel trained to do valuation, so the revaluations are usually performed by the GVD, a
largely autonomous professional entity attached loosely to the Ministry of Works and Supply. This
agency has become much more professional and organized in the last two years with the assistance
of the Overseas Development Administration (UK). For 1992, the GVD performed 11 complete
revaluations (20 percent of the 55 potential client local governments), and 4 supplementary
revaluations to add properties overlooked or built since the last revaluation. (See section IV for an
analysis of the valuation process.) For taxpayers to accept valuation as fair and objective, it is
important to have a means of resolving disputes. This is the task of the Rating Tribunal, which
receives administrative support from the GVD. While not perfect, it appears to be more effective in
issues of rateable values than are the mechanisms for resolving most other conflicts regarding land.
Lusaka and the other main cities have their own valuation departments, which are
understaffed, but may contract with private valuers or with the GVD to help with major valuations.
The GVD was not involved in the valuation exercise just completed in Lusaka in 1993, however; all
other cities are now asking the GVD to help them supervise or carry out revaluations.
As the capital city, Lusaka has special problems collecting rates. First, many buildings belong
to government, which does not pay taxes. The law envisions government payment of a "Contribution
in Lieu of Rates." Such payments have been made in the past but have sharply decreased under the
current fiscal stringency. When such payments were made, they fell short of the amount that would
have been due if the same buildings were privately owned.' Lusaka (city council) itself owns a lot
of housing and other property (some 15,000 buildings as reported in chapter 1), but it does not tax
itself. Church and nonprofit organizations do have to pay rates on the theory that they receive
services. Finally, Lusaka finds that a significant share of the most valuable buildings are occupied by
regional agencies and by foreign embassies and consulates. In a bizarre interpretation of international
law, if one room in a building is rented to and occupied by a diplomat, the entire building is exempt
from paying rates.'
E. Nominal and effective rates of taxation
When Lusaka property was revalued in 1993, no official estimate was made of the average
increase in assessments. It was also unclear how much of the increased valuation roll was new
construction and how much a result of revaluation of improvements that were on the previous roll.
Some interviewees claimed that the average increase was between 10 and 40 times. When the owners
were advised of the new values, few complained because they were still below actual market values.
Owners assumed that the tax rate would fall accordingly, keeping the actual tax constant in purchasing
power terms. The 1993 tax rate was 11 percent, leading some ratepayers to assume that the 1994 rate
would be 0.25 percent to 0.5 percent. Instead, the city council asked the Ministry of Local
6 In 1992, according to the GVD, the central government should have paid K13 million in lieu of rates on government-
owned properties in Lusaka. It actually paid K5 million. No payment was made in 1993. (Source: GVD Rating Position
Paper, 1993, p. 1.)
' This quirk was reported by several interviewees and affirmed by the Minister of Local Government and Housing in
a talk to the Economics Association of Zambia on 12 January 1994.