Mr Yaw Osafo-Maafo, Senior Presidential Advisor, has charged members of the Local Government Service Council to put in measures to improve the accounting functions and efficiencies of the Assemblies, especially in revenue generation.
He said it was strange that, with the kind of properties and businesses in most of the Metropolitan Assemblies in cities like Accra, Kumasi, Takoradi, and others, most of them still depended on Central government for their sanitation expenses as well as rely heavily on the District Assemblies Common Fund.
Mr Osafo-Maafo who gave the charge when he inaugurated a 14-member Local Government Service Council in Accra observed that after three decades of decentralization process, not much had been changed in terms of Assemblies being independent on Central Government in terms of support for their operations.
The Council Chairman, Dr David Wellington Essaw, with other members including Dr Nana Ato Arthur, Head of the Local Government Service; Dr Esther Oduraa Ofei-Aboagye and Reverend Mrs Sanatu Nantogma, nominees of the President; Dr Kodjo Esseim Mensah-Abrampa, Director General of National Development Planning Commission and Madam Irene Naa Torshie Addo.
“There are a lot of revenue opportunities for most of the Assemblies and it is not certain whether it is lack of leadership or lack of expertise or the Laws governing the Local Government systems are inhibiting the ability of the Assemblies in improving their Internal Generated Fund (IGF). Or is it corruption at the Assemblies? These are the issues that should attract the attention of the Council Members”.
Mr Osafo-Maafo said the 2021 Population and Housing Census (PHC) results had provided relevant data and information on building structures in the country to generate revenue including property rates, and property related taxes.
He said the results indicated that 80 per cent of the 10.7 million structures were actual brick and mortar structures. Some 60 per cent of the brick-and-mortar structures were residential properties.
“Most, if not all, the structures were provided with QR codes for easy identification and location. The Assemblies must therefore liaise with Ghana Revenue Authority and other relevant bodies for advice on how to use the information to collect and improve their property rate collection drive.
”There should be no excuses for the Assemblies not to improve on their IGF and wean themselves off the Central Government budget or the Common Fund,” he said.
“To put in context, based on a recent World Bank Report, Property Rates contribute an estimated four per cent of GDP across the European Union. Similar contributions (3 percent of GDP) in the case of the United States of America and two percent for Japan have also been recorded,”
“In more similar contexts in Africa, the performance of property rates remains far better than the case in Ghana. For example, property rates and property taxes contribute an average of 1.5 percent of the GDP in South Africa, contributes one percent in the case of Mauritius, and 0.5 percent in the Gambia.
“In Ghana, we only realise 0.03 percent of GDP from property rates and other land based taxes, the Gambia generates revenue from property rates and taxes about 17 times more than we do in Ghana,” he said.
He noted that the property rate was a localised tax and therefore, to justify why people should continue to pay, there must be visible signs of improvement at the community level which could be linked to the rates paid.
Mr Osafo Maafo said it was an important canon of taxation that there was a correlation between taxes paid and improvement in the social and economic wellbeing of the tax and rate payers.
Dr Wellington Essaw, on behalf of Council Members that the President for the opportunity pledged their commitment to harness energies and experiences to secure and fast track the effective local government administration.