Politics

Ghana can raise up to ¢12bn annually from property taxes in Greater Accra – Prof. Ackah

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Economist and Associate Professor at the Institute of Statistical, Social, and Economic Research (ISSER), Prof. Charles Ackah has blamed revenue mobilisation agencies for setting low achievable tax revenue targets.

This he believes is a major cause of Ghana’s low Gross Domestic Product to-ta- ratio.

The Ghana Revenue Authority and municipal assemblies hope to raise about ¢165 million from property tax nationwide.

This Prof Ackah believes is not ambitious enough, adding, the Great Accra region alone can contribute 12 billion from property taxes annually.

He made this assertion during the Joy Business special discussion on the theme “Ghana’s High Tax Regime; the Causes and Finding Remedies”.

According to the Ghana Statistical Service, there are about ¢8.5 million completed residential structures in Ghana in which 1.7 million are found in Accra.

The Greater Accra region alone accounts for approximately 21% of completed residential structures in Ghana.

“If you do the analysis and you decide to raise ¢165 million target in Accra alone, divide 165 million by the structures in Accra and each property is likely to pay just about 97 a year. This means that the target is quite low.”

“According to my analysis, we could raise as much as ¢12 billion in property taxes alone. So property tax holds a huge potential to boost the country’s tax revenues. Even if we focus on high-earned communities and the increasing luxury real estate, we can do more”, he added.

He further called for a more accountable way of setting revenue targets with constant monitoring from the legislature.

“What we need to do is to mandate parliament to set revenue targets and apply punitive measures for failure to meet targets.”

Prof. Ackah also alluded that the slow growth of the economy is a contributing factor to Ghana’s low tax revenue.

According to him, the more the economy expands and properly formalises, the more government is able to expand the tax net.

The GDP-to-tax ratio measures the proportion of tax revenue collected over a period to a country’s total GDP.

Research shows the countries with high GDP per capita often have low tax revenues since the size of the economy has a direct effect on effective tax compliance.

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