THE REFORM OF THE LAND TAX 



the scheme then being studied, that he aimed at superseding the old method 

 of taxing land according to rented value b^' that alread}- applied in Great 

 Britain and Germany for the benefit of the State, and in Australia for the 

 benefit of the municipalities, the method namely which was based on capi- 

 tal or market values. 



The system hitherto in force in Uruguay' was that of taxation by dis- 

 tricts. But the minister in this note observed that " the rudimentary and 

 arbitrary regulation by districts could exist only while there were no other 

 means of arriving at a trul}" equal distribution of the tax ; the method of 

 taxing by districts interpreted in truth a principle in direct contradiction 

 to the modern tendency of taxation, of which the incidence should be pro- 

 portionate to the capacity to pa}^ " . To support his thesis the minister gave 

 the following example. If in the same district there were fields worth 

 respectively- S lOO, § 120, S 150, S 200 and 8 250 the hectare, their average 

 value would be S 164, on which taxable value the 6 y2 P^r thousand tax would 

 be imposed. But thus, in relation to the -true value of his property, 

 each proprietor would pay at an inverse ratio to his capacity- to pay : 

 the owners of the first field 10.66 per thousand, the owner of the second 

 8.80, the owner of the third 7.10, the owner of the fourth 5.33, and the 

 owner of the fifth 4.30 



To reach the present law a new census of rural propertA' was first 

 necessar}^ until there rhould exist a sj'stematically drawn-tip cadaster, the 

 preparation of which would take long. The new census has beecn completed 

 with remarkable celerity in quite recent years. 



Those in charge of the valuation took into account, in determining 

 the value of estates, data in the registry of sales, and in most cases they 

 were able to obtain plans of the real estates and their dimensions from sur- 

 veyors employed by private persons. Thus it was possible to prepare a 

 sufficiently true and exact classification of rural properties. 



The necessary- basis therefore existed for applying to rural real estate 

 the method of taxation already in force in the case of urban real estate, 

 namely the method accordant with their precise and indi\ddual values; 

 and the figures of the new census, which allow lands to be burdened accord- 

 ing to the effective capital they represent, support the whole edifice of the 

 reform we are considering. 



In adopting the capital value of landed property as the basis of the 

 tax, the government of Uruguay took into account conditions which are 

 peculiar to all new countries in the full period of their growth, when their 

 natural resources are still far from being developed" or 3'ielding their maxi- 

 mum return. The value of Uruguayan land may have fallen slightly 

 in 1914-T915, owing to the extensive reaction from events in Europe ; but it 

 remains a value of which the increase is certain in normal times, and which 

 at present has in no way reached the highest point possible to it. 



The following table shows the progress in the value of the lands of 

 the republic during the last ten years : 



