Tema-Ghana, June 6, CDA Consult – The government’s plan to transfer property rate tax collection to the Ghana Revenue Authority (GRA), according to The Chamber for Local Governance (ChaLoG), is categorically unlawful and violates Article 240 (1) of the 1992 Constitution.
ChaLoG issued a statement that was forwarded to the Communication for Development and Advocacy Consult (CDA Consult) in Tema that stated, “ChaLoG wishes to state without any fear of equivocation that, Property Rate Tax is a ceded revenue for District Assemblies as enshrined in Section 124 (3) of the Local Governance Act, 2016 (Act 936) and therefore cannot be collected by any other institution other than the District Assemblies.”
It concluded that the government’s stated arguments for taking over the collection of property taxes were implausible, such as the difficulties in locating properties on the ground and identifying property owners.
The government was not justified in claiming that the 185 MMDAs lack valuation information on their properties and that the law requires that properties be appraised before rates are imposed, according to ChaLoG, who also stated that this was untrue.
The Chamber questioned whether the GRA physically identified properties on the ground before taking over the collection of the Property Rate Tax through an electronic payment platform, as well as whether the GRA physically identified property owners/payers after it took over in January 2023.
It also questioned if the GRA created valuation data in the 185 MMDAs, which the government said did not have their properties evaluated, as well as whether the Authority obtained the valuation and ratepayers’ phone numbers on its own before sending them text messages.
As much as ChaLoG thinks that District Assemblies face teething issues while collecting property taxes, it contrasts sharply with the government’s clumsy plan to take over the collection of a ceded revenue for District Assemblies, it said.
According to ChaLoG, the government’s action was clearly an affront to fiscal decentralization, which stipulates in Section 124(b) of the Local Governance Act, 2016 (Act 936) that District Assemblies must have some autonomy to raise their own Internally Generated Funds (IGF) free from interference from the central government.
In order to save the MMDAs from the severe liquidity problems they were experiencing and their impact on the public services they were expected to provide to the general public, ChaLoG urged the government to immediately suspend the collection of property rates by the GRA and permit the MMDAs to resume the collection.
They urged the government to stop collecting property taxes through the GRA and give the MMDAs the authority to do so in order to support local development initiatives.
According to ChaLoG, the government should return to Parliament to amend Section 124 (3) and remove it as a source of IGF (ceded revenue) in order to protect the integrity of local government and fiscal decentralization in Ghana if it is still adamant that the District Assemblies are unable to collect Property Rates.
