Pay critical attention to property tax for local dev’t – Ali-Nakyea

Tax Expert and Attorney, Abdallah Ali-Nakyea has charged the government to pay critical attention to the collection and use of property taxes, in its quest to develop the country at the local level.

According to him, it is “high time government looks into the property taxation system as a major source of revenue, as other countries have adopted.”

This intervention, he adds will not only support the agenda of massive infrastructural development, but also lessen the pressure on central government in the release of funds for a similar purpose.

Property tax is a real estate ad-valorem tax, calculated by a local government and paid by the owner of the property. The tax is usually based on the value of the owned property, including land.

Ali-Nakyea was addressing members of the Institute of Financial and Economic Journalists (IFEJ) on Sunday, at a workshop organized in collaboration with the German Development Cooperation (GIZ) on the need for Ghana to have a Mining Revenue Act, in Koforidua in the Eastern region.

He said “what we have in place is property rates and I don’t find the property rates commensurate with the value of the properties. We should gravitate to a property tax system because properties appreciate in value they don’t depreciate ideally. The property tax is the tax we pay on the appreciated value of your property.”

“The idea is that, to enhance the value of the property more, the area where you are, should be improved; you must have good roads, good drainage system, lighting on the street, have a clean environment and to be able to pay for all these services, you need money and so property taxes are ideally taken and administered for the benefit of the communities where the properties are sited.”

Ali-Nakyea expressed worry about property tax being spent on recurrent expenditure rather than capital development explaining that it makes it difficult to monitor the prudent use of the funds accrued.

He meanwhile challenged the Ghana Revenue Authority (GRA) to live up to its mandate of training and empowering the relevant institutions on collecting property tax, as it has seemingly reneged on that function.

His comments follow the concerns raised that district assemblies lack the needed capacity to collect property taxes in their respective jurisdictions.

The Ghana Revenue Authority Act 2009 (Act 791) stipulates that the Authority advises, trains and empower district assemblies to collect revenue.

“As for capacity, in every institution, at any point in time, there are capacity challenges and that is why there is always continuous learning. Professional bodies have what we call, continuous professional development and continuous professional education.”

“If it is capacity, are we saying we cannot train and empower people? Can’t we get the Land Valuation Board to go round and help property revaluation? Knowing very well how much we can raise from it, we can recruit, train and deploy them on the field; it can be done”, the tax expert added.

The GIZ/IFEJ workshop, was to among other things, aid the journalists to better appreciate the provisions in Ghana’s Mining Revenue Governance Framework, in order to produce unbiased, accurate and research-based reportage on the extractive sector.


By: Ghana/ Ama Bonsu