Fight challenges with property rate collection!
At his vetting by Parliament’s Appointments Committee on January 21, 2025, the then Minister-designate for Local Government, Chieftaincy and Religious Affairs, Ahmed Ibrahim, expressed his intention to focus on property rates as a means of generating more revenue for the state.
Property rate is a ceded revenue source for District Assemblies, including Municipal and Metropolitan assemblies, as enshrined in Section 124 (3) of the Local Governance Act, 2016 (Act 936).
Thus, the rate cannot be collected by any other institution other than the District Assemblies.
Also described as a property tax, property rate is applied to immovable structures like houses, apartments, estates, and commercial spaces.
The determination of the tax depends on the property’s estimated value vis-à-vis where it is located (rural or urban area, as well as the specific locations of towns or cities) so that some rates may be higher than others, even within the same enclave or area.
The collection of property rate in the country faces difficulties, particularly in the rural areas where most of the houses are age-old buildings for which such a levy had not been paid hitherto, and so their occupants think those buildings do not deserve to be levied for any such payment.
This means there is the lack of education as to why the payment of property rate is important.
Even where there are people ready to pay it, the mode of payment or collection is an issue.
No wonder, in 2022, the Ministry of Finance, under the Ghana Revenue Authority (GRA) Act of 2009 (Act 791), introduced a Property Rate Reform Project to increase the collection of property rates nationwide.
Under that reform, the GRA, as an authorised entity, can facilitate the efficient collection of property rates, but does not levy them; it only assists in their collection by providing technological support, data, security, and transparency.
The GRA is said to have provided a platform to remove all the ills of the old regime and give each citizen domiciled anywhere in the world the opportunity to ensure that the monies they pay go to the respective assemblies to help them carry out their mandate of collectively developing the country.
The Ghanaian Times can deduce from Mr Ibrahim’s intention to enhance the collection of property rates across the country as a means of generating revenue for local development that in spite of the reforms and what have you, things are not well with the payment and collection of the rates.
However, if in the face of all the challenges, Mr Ibrahim says “It (property rate) is the quickest and most effective way of generating revenue at the district level, then the minister has planned what to do.
Imagine that successive governments have relied on loans to pay for salaries and finance most of its development projects because of its inability to raise enough revenue locally from taxes.
The unbridled borrowing by the government creating a huge debt burden for the country can be checked to some extent if the collection of property rates can be enhanced to rake in more revenue.
The Ghanaian Times wishes Mr Ibrahim well and prays that his noble idea would see daylight and make him have his name printed indelibly in the annals of the country’s tax revenue history.
