Government's intention to hand over property rate tax collection to GRA is illegal — ChaLoG

The Chamber for Local Governance (ChaLoG) claims that the government's intention to hand over property rate tax collection to the Ghana Revenue Authority (GRA) is patently illegal and breaches Article 240 (1) of the 1992 Constitution.

The Communication for Development and Advocacy Consult (CDA Consult) in Tema received a statement from ChaLoG that read, "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 came to the conclusion that the government's stated justifications for taking over property tax collection, such as the challenges in locating properties on the ground and identifying property owners, were unrealistic.

According to ChaLoG, who also asserted that this was inaccurate, the government was not justified in asserting that the 185 MMDAs lack valuation information on their properties and that the law mandates that properties be evaluated before rates are imposed.

The GRA's physical identification of properties on the ground before taking over the electronic payment platform for the collection of the Property Rate Tax, as well as its physical identification of property owners/payers after taking over in January 2023, were both questioned by the Chamber.

It also questioned if the Authority independently acquired the valuation and ratepayers' phone numbers before sending text messages to the 185 MMDAs, which the government said did not have their properties appraised.

ChaLoG said that while it believes that District Assemblies have teething problems when collecting property taxes, this situation contrasts noticeably with the government's botched plan to take over the collection of a revenue source that was ceded to District Assemblies.

The Local Governance Act, 2016 (Act 936)'s Section 124(b) requires that District Assemblies have some autonomy to raise their own Internally Generated Funds (IGF) without interference from the central government. According to ChaLoG, the government's action was clearly an affront to fiscal decentralization.

ChaLoG urged the government to immediately halt the collection of property rates by the GRA and allow the MMDAs to resume the collection in order to protect the MMDAs from the severe liquidity issues they were facing and their impact on the public services they were expected to provide to the general public.

In order to promote neighbourhood development efforts, they encouraged the government to discontinue collecting property taxes through the GRA and grant the MMDAs the ability to do so.

According to ChaLoG, if the government is still adamant that the District Assemblies are unable to collect Property Rates, it should go back to Parliament to amend Section 124 (3) and remove it as a source of IGF (ceded revenue). This would protect the integrity of local government and fiscal decentralization in Ghana.

—CDA Consult II Contributor