Smart City initiatives integrate technologies and data to improve citizens’ quality of life, enhance sustainability, and foster economic growth. These initiatives utilize various types of information, including spatial data, sensors, and other technologies, to optimize services, relying heavily on spatial data sharing for accessibility. Geographic Information System (GIS) has proven to greatly facilitate Smart City development, via integrating spatial data, including land use, remote sensing, drone, and other spatial data sources. Spatial data sharing enables Smart City initiatives to collect, process, analyze, and visualize spatial data, which is critical for urban systems and services. Several issues were identified in enabling spatial data sharing in Smart City development, including data standard, quality, compatibility, privacy and security, and also accessibility. To better understand the challenges in implementing spatial data sharing in Smart City initiatives, this study presents a systematic literature review (SLR) of previous and current studies in this field. The PSALSAR technique was used to synthesize data from three major databases: Web of Science, Scopus, and IEEE Xplore. The results reveal that the Asian region has published the most articles on this topic, with China leading in terms of publications. Further investigation shows that the most frequently used keywords are “data,” “city,” and “smart.” Four main research focuses were identified: spatial data, technological, social and institutional, and environmental. Additionally, five key issues were scrutinized: technological, data-related, social, environmental, and governance issues. The study outlines four main future directions: empowering community collaboration in implementing SDI in Smart Cities, improving spatial data integration, accessibility, and security, integrating advanced technologies to enhance networking, security, services, and modeling, and transforming governance toward spatial enablement.