Accra, Ghana, June 14, 2018//-In Ghana, many crave for the acquisition of properties because, they pay virtually no tax on them. In UK and USA, property tax is one of their major sources of revenue. Property Tax can safe Ghana if there is the will power to do so, which can go a long way to improve the country’s revenue stream.
The proportion of Ghana’s debt to GDP is so appalling, and innovative ways must be devised to generate revenue internally.
Rising debt stock
According to figures from the Bank of Ghana, Ghana’s public debt stood at GHC122.2billion as at 31st December 2016. As at 31s December 2017, it had skyrocketed to GHC142.5 billion, and it is expected that, the trend will take the debt stock to GHC150 billion by September, 2018.
When the Chinese loan of $19billion comes as expected by August, and with the exchange rate of GHC4.71 to the $1 (as at Wednesday 13,2018, Time: 8:24PM), then the $19billion Chinese loan is approximately GHC89.6 billion.
By this simple analysis, Ghana’s total debt stock is ascending to GHC239.6 billion by September, 2018. (GHC150 billion +GHC89.6billion).
Property Tax can help cut down this burden of government to some extent, because, the direction this country going in terms of borrowing for development, which is not even properly managed, puts the life of future generation into a quagmire of poverty.
Even without any statistics, the indiscriminate borrowing of successive governments confirmed the fact that, there is something wrong with our internal revenue generation capacity.
Property tax is one sure means of improving the revenue for the government through the local assemblies (MMDAs). Unfortunately, property tax is seriously under harvested. If the government can build database of all properties and value them, it will remove cap on property tax revenue collection. But then there are also other costs that go onto, say Commercial Building Survey, which can be quite an onus on the homeowner itself, so in all reality, a homeostasis can never be achieved.
The property tax collection has been left into the local assemblies and no significant improvement has been achieved in that regards.
Advice
It is about time the central government lends support to improve revenue through property taxation in the country. Interestingly, the law fully backs the assemblies to collect such taxes, but unfortunately, the local authorities failed to invoke the laws to achieve their aim.
Also, one major factor that is thwarting the efforts of the assemblies is that, they lack the convincing voice to create awareness of the property payment.
Many hate to pay property tax because, they see no reason to do so, and this sterns from the fact that, those few local assemblies who are collecting the tax refuse to ensure proper accountability. Revenue from property tax must be linked with visible developmental projects in the various communities.
This article does not fully endorsed giving the property tax collection to private companies. The assemblies seem to believe this practice because they lack capacity to collect their own taxes.
Apart from these companies possibly conniving with the tax payers to loot government, they can also abandon the venture if it proves unprofitable.
The local authorities, because they are mainly government appointees, are afraid politically to use all legitimate means to collect the property tax for the fear of losing power.
The local assemblies can fall on National Service Secretariat to request for men and women to help them gather cadastre on all properties under their jurisdiction, value them for tax purposes. This will promote some level of continuity in the assemblies.
Cadastre is a comprehensive land recording of the real estate or real property‘s metes-and-bounds of a country, according to experts.
Property tax collection should be made a national issue and the government must invest in it because much is expected to accrue to the country. Jobs can be created through property tax collection, and this will help neutralize the permanent unemployment and poverty facing the country currently. This will also reduce government borrowing and put the country on the right footing.
By Francis Gamli- Dovene, a facilitator UCC CoDE& UEW -IDeL
