ABSTRACT
This chapter analyzes the allocative, distributional, and revenue effects of the immovable property transfer tax (IPTT), and suggests that ways to improve the performance of the tax. The IPTT constitutes a revenue source to both zilla parishads and paurashavas. In many other aspects of the administrative process, the roles of officials at the zilla parishad and paurashava levels in the IPTT allocation process are entirely passive. In evaluating the IFTT, three major issues must be addressed: the effects of the tax on the use of resources, the impact of the tax on die income distribution, and its ability to generate revenues. The overall increase in tax revenues for all paurashavas and zilla parishads hides substantial variation in the performance of the IPTT for individual local governments. One measure of die responsiveness of the IPTT to changes in economic conditions is its income elasticity, or the percentage change in revenues divided by the percentage change in income.
