Financial Analyst, Dr. Richmond Atuahene says the next government needs to radically revive Ghana’s property tax system in order to drastically improve domestic revenue generation.
Property tax, he says is one of the effective means the government can diversify its revenue streams and improve the overall revenue mobilization. He further states that property tax can also bolster the relatively low tax-to-GDP ratio and address the persistent fiscal challenges.
Ghana has been grappling with a very low tax-to-GDP ratio performing below the average of Sub-Saharan Africa and Lower-Middle Income countries. The Ministry of Finance, the Ghana Revenue Authority (GRA), and the UK’s Institute for Fiscal Studies estimate that despite the numerous efforts to enhance tax mobilization, the country was able to reach just 13.8% tax-to-GDP ratio as of 2022.
This 13.8% represents just a six percentage point increase in over 20 years
In a document recommending ways the next administration can enhance the tax system, the financial analyst drew comparisons from Rwanda and Uganda which have successfully implemented systems to effectively mobilize taxes from owners of properties leading to significant improvement in their tax-to-GDP ratios.
“Rwanda and Uganda have implemented successful property tax regimes and environmental taxes, which have contributed to their higher tax-to-GDP ratios,” the document cited by The High Street Journal read.
The analyst cannot fathom why after the completion of critical infrastructure like the National Identification System, street naming, and digital address system, it cannot initiate processes to collect property taxes.
Dr. Atuahene argues that these projects if integrated into a unified property tax IT system, can serve as the foundation for a transparent and efficient tax regime. Such a unified system, he says should incorporate essential functions like property identification, assessment and valuation, billing, payments, compliance monitoring, and taxpayer services.
Such a system would require seamless collaboration between ministries, departments, agencies, and local governments to ensure success.
“Government and MDAs must urgently resume the collection of property rates, while the State addresses the challenges associated with the use of the unified common platform capable of billing, collecting, and reporting property rates nationwide,” he noted.
Dr. Atuahene further called on the Lands Valuation Authority to ensure that market values for all lands, houses, and properties are regularly updated to support efficient tax mobilization. He stressed the need for urgency, urging the government to operationalize property taxes without delay to generate significant domestic revenue.
“The Lands Valuation Authority has to make sure that the market value of all lands, houses, and other landed properties are determined at all times to support efficient property and rent tax mobilization. As a matter of urgency, the government after the long completion of the national identification project, the street naming, and property addresses the government should urgently embark on the property tax project,” he recommended.
The abandonment of property tax collection has long been a missed opportunity for Ghana, a nation grappling with economic challenges and mounting debt.
Experts have repeatedly argued that property taxes, which are typically stable and equitable, could provide a much-needed boost to the national coffers if effectively implemented.
