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Over 80% of residential units owe property tax arrears — Research study

By: Suad Yakubu
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Members of the AMA and other assemblies at the policy workshop
Members of the AMA and other assemblies at the policy workshop

More than 80 per cent of residential units owe property tax rates ranging from less than GH¢100 to GH¢500 and above, a research study conducted by a team from the Durham University Business School in the United Kingdom (UK) has revealed.

The research team included a professor in Finance, Prof. Dennis Philip, a professor in Economics and Finance, Prof. Damian Damianov, and a Ghanaian PhD student, Mr Precious Brenni.

Presenting the research findings to the Accra Metropolitan Assembly (AMA), Prof. Philip said only about 19 per cent of residential units had cleared their property tax arrears as of 2016.

“Nineteen per cent of the sample is nil, which means they have no arrears. Everybody else has some amount of arrears,” Prof. Philip said.
This was made known during a presentation of the research findings at a Policy Workshop on Property Rating on May 23 in Accra.

He added that the record of only 19 per cent of residential units being exempted from the property tax arrears net indicated the challenge of non-compliance.

The research, among other things, directed a call to enforce and regulate property taxes to ensure compliance.

Prof. Philip also called for an equitable distribution of local amenities and a boost in infrastructure to reduce arrears.

The study made use of data from the AMA covering the period between 2007 and 2016 and comprising 52,087 residential units, including observations on property values, rate imposts, occupancy types and property rate arrears.

Increase engagements
The Advisor to the Mayor of the Accra Metropolitan Assembly (AMA), Mr Desmond Appiah, called on the various assemblies to promote engagements.

He stressed on the importance of holding discussions and educating individuals and stakeholders on policies at the various assemblies.
He also mentioned that the various Public Relations (PR) units stationed in the assemblies could be put to good use to boost engagements.

“So as assemblies, we should make use of our PR units, community engagement and town halls and send the message, explain our policies, especially the rating, what it means,” he said.

He agave an assurance of further engagements to ensure that the assembly fulfilled its mandate of city and town development.
“We look forward to further engagements, not only on this programme but other ongoing programmes,” he added.

Contribution to Ghana beyond aid
The Senior Technical Advisor at the National Development Planning Commission (NDPC), Dr Wilfred Anim-Odame, reiterated President Akufo-Addo’s Ghana Beyond Aid vision, stating that domestic revenue mobilisation was instrumental to its realisation.

He stated that the onus lay on the Metropolitan, Municipal and District Assemblies (MMDCA) to develop revenue mobilisation capacity by effectively harnessing the country’s resources.

“Domestic revenue mobilisation is critical to making the President’s vision a reality. A huge burden is, therefore, placed on the leadership of Ministries, Departments and Agencies, as well as Metropolitan, Municipal and District Assemblies to begin to assess their revenue mobilisation capacities with the view to developing strategies for efficiency and effectiveness,” he said.


Simplified revenue collection methods
Dr Anim-Odame implored the AMA and various assemblies to employ technology and the use of electronic systems for easy revenue collection.

Citing Namibia, he said the system had been designed such that the property rates were tied to the monthly utility bills. Afterwards, money was disbursed to the various sectors.

The AMA, in turn, indicated their resolve to improve revenue collection by reducing human involvement.