Property taxation: The missing link in domestic revenue mobilization in post-IMF Ghana

By Dr. Richmond Atuahene

1.0 Background/ Introduction

Property taxation is widely viewed as the most critical untapped avenue for sustainable domestic revenue mobilization in post-IMF Ghana. Despite the recent identification of over 10 million ratable properties, property rates have historically underperformed. Expanding this revenue base is vital to reducing the country’s fiscal deficits and avoiding future external bailouts.

Property taxes (locally known as property rates) are considered a major missing link in Ghana’s domestic revenue mobilization because the system has historically been plagued by outdated property valuations, lack of comprehensive property databases, and ineffective local tax enforcement by Metropolitan, Municipal, and District Assemblies (MMDAs).

Because immovable properties are highly visible and cannot be easily hidden, a well-implemented property tax could significantly expand the country’s tax-to-GDP ratio—reducing heavy reliance on indirect and distortionary taxes. However, this potential remains largely untapped due to the following specific systemic challenges:  The absence of a comprehensive database on various properties countrywide: Historically, there has been a lack of updated databases identifying property owners, locations, and accurate valuations. Many properties have not been properly mapped or valued by professional officers, meaning millions of property owners never receive tax bills.

Decentralized and weak collection capacity in the MMDAs: Property rates are primarily meant to be collected by MMDAs. However, many local assemblies lack the logistical, technical, and human resource capacity to effectively track defaulters or enforce compliance. Low Public Compliance and deficit trust with MMDA. Voluntary compliance is notoriously low because citizens often do not see a tangible link between the taxes they pay and local development. When property owners pay rates but continue to grapple with poor roads and inadequate sanitation, their willingness to pay drops significantly.

Political interference by various governments   and fear of backlash: Local assemblies frequently shy away from strictly enforcing property rates for fear of alienating voters. The political sensitivity of local taxation makes it a difficult instrument to leverage.  Institutional Defaulters like schools, hospitals and others: Even government institutions, which are not legally exempt from paying property rates, have historically been accused of failing to pay their share, setting a poor example for the public.

Property tax is defined by (Malme and Youngman 2001) as taxes that are imposed on capital with some types of capital taxed at rates. Property rates is a direct tax meaning the person owning the property is taxed directly. It is also progressive, in that the properties of higher value pay more. Hence, property tax plays a key role in local public finance. Also, an individual property tax liability is the product of the tax rate and the property assessed value, the value the jurisdiction assigns to property.

Essentially, property rate is based on the assessed value of the property. Around the world, property rates, formally known as property taxes, are used to finance an array of services from waste management to education. In the UK, for example, council tax is used in conjunction with the government funds to provide education, social services, cultural services, environmental services, and local planning. This includes, but is not limited to, flood defense, highway and transport services, police and crime commissioner, as well as fire service. The more revenue raised at the local level, the less reliant each council is to the central pot

As property markets develop, taxing jurisdictions have opportunities to improve property tax equity, revenue buoyancy, and efficiency by moving from an area-based to a value- based assessment for the property tax. Even in nascent property markets, using simple valuation systems, taxing jurisdictions can move incrementally toward a value-based system through incorporating value-based adjustments to an existing area-based system. These value-based adjustments would include such factors as location, land and building use, building structure and construction materials, utilities, and condition.

Moving toward a value-based system should be approached as a short- to medium-term intervention. Throughout the world, property taxes are largely assigned to the local government level, typically by assigning the tax base itself to the local government. Theory argues that local governments should rely on revenue sources that are linked to the “benefits principle,” such as user charges on local-level public services and on immovable tax bases (such as land) to minimize economic welfare inefficiencies. Similarly, central governments should focus on the broad-base taxes levied on income, consumption, and trade, largely based on the “ability to pay principle” of public finance and due to the mobile nature of these tax bases. Consistent with this, the property tax base is typically designed as a local own-source revenue (OSR), assigned to local governments who levy and administer the property taxes within the policy and administration framework set by the central/state government.

However, there are several countries where the property tax remains structured as a central-level, shared tax (including Lithuania, Chile, Vietnam, and the United Kingdom for its non-residential property taxes). As a central-level shared tax, tax policy and administration remain under central government control, with the majority of revenues typically apportioned to the local government budget. As a shared tax, the property tax has the characteristics of an intergovernmental revenue transfer (grant) rather than an accountable local government. Arguments are made for a centrally-shared tax approach for administrative reasons, arguing that local governments do not have the administrative capacity to manage the property tax system.

Even in countries where the property tax base is given to the local government, higher-level governments often may co-administer the property tax to overcome capacity constraints, take advantage of economies of scale, and/or ensure equity in administration. For example, the central or state government may be responsible for fiscal cadastre maintenance and valuation, while local governments may be responsible for property tax billing, collection, and enforcement

Property-related taxes have a strong potential for revenue mobilization, especially in rapidly urbanizing areas. In fact, urbanization is a wealth-creating process, causing rising land values, which, if appropriately captured, can provide funding for much-needed urban infrastructure and services. The property tax base is immobile, which minimizes economic efficiency implications and is considered the least distortive tax instrument followed by consumption taxes, personal income taxes and corporate income taxes, respectively (Johansson, Heady, Arnold, Brys and Vertia 2008)

Due to its immobility, the property tax base captures the value of location-specific capital investments and benefits from government programs and services not captured otherwise through various fees, user charges, and other taxes. This allows the property tax to operate as a form of “benefits tax,” allocating the tax burden across properties with differential benefits as reflected in differential property values. The immovable property tax base also makes it relatively easier to identify and capture the tax base and allows the property itself to be natural collateral in case of tax nonpayment

In Ghana, [Ghana Revenue Authority (2015). Income Tax Act 2015 (Act 896). ] explains that gain or profit from any right granted to any other person for use or occupation of any property is chargeable to income tax. Gain or profits for use or occupation of any property includes any royalties, rent, and premium or like consideration received for the use or occupation of property. Property-related taxes in Ghana have a strong potential for revenue mobilization, especially in rapidly urbanizing areas. In fact, urbanization is a wealth-creating process, causing rising land values, which, if appropriately captured, can provide funding for much- needed urban infrastructure and services.

In Ghana, like other developing countries, the Metropolitan, Municipal and District Assemblies (MMDAs) have reeled without adequate financial resources over the years, compelling them to persistently rely extensively on inter-governmental transfers to fund their activities and for local development. Local revenues are critical for sustainable and equitable revenue growth and enhanced service delivery in Ghana and elsewhere in sub-Saharan Africa, and property taxes can provide fiscal space to fund local services. On average, low-income countries like Ghana generate about 0.3-0.5 percent of GDP from property taxes; these consist mostly of annual taxes on immovable property (houses, commercial buildings) and the sale of property.

In contrast, property taxes represent around 2-3 per-cent of GDP in OECD member countries. The responsibility of property rate collection lies with the Municipal, Metropolitan and District Assemblies (MMDAs). Property rates are collected annually as part of the Internally Generated Funds (IGF) for the development of social amenities, local services, and infrastructure at the local levels. It is a tax on immovable properties such as land, buildings and improvements.

Over the years, District Assemblies have been unable to maximize revenue collection, collecting less than 30% of their revenue targets, due to varying challenges from ignorance of the population to the lack of a database to monitor and track properties and their owners. Addressing these challenges and implementing property rate reform can be the necessary tool we need to wean ourselves from the feeding bottle of donor money. The over reliant on the District Assembly Common Fund seems to provide a comfortable cushion and promotes a lax attitude towards IGF like property taxes.

Funding the urgent development needs of  MMDAs require additional sources of domestically generated revenues. Property taxation could prove to be an important source of financing to pay for the infrastructure and public service investments the various urban cities require, but implementing new property taxes that are always politically contentious and a technical challenge. In Ghana, property taxes are governed by the Local Government Act, of 1993 and collected by MMDAs.

World Bank data (2020;2023) noted that Ghana has not failed to fully capitalize on diversifying its tax revenue streams through the introduction of property taxes, and taxes on digital services, unlike some of its peers. For example, Rwanda in 2019 had implemented successful property tax regimes which have contributed to their higher tax-to-GDP ratios. Rwanda achieved significant property tax growth by successfully shifting to a decentralized, digitized administration and unified land & tax data.

Rwanda modernized its property tax by shifting collection authority from local governments to the Rwanda Revenue Authority (RRA). This central coordination integrated the tax system with the national land registry and digital payment platforms, enabling better property identification and significantly reducing administrative leakages. The World Bank supported these reforms, citing how integrated land registries, market-based valuations, and streamlined online payment platforms dramatically improved local revenue collection, equity, and transparency.

Ghana operates a property rate system which is administered by local authorities (MMDAs) and the related collections do not form part of central government revenues. The property rate system should be jointly administered by central government and MMDAs. By implementing aggressive and equitable property taxes by the Government and MMDAs this will a long way to improve the Ghana’s tax to GDP ratio.

Diversifying revenue streams is critical for enhancing Ghana’s fiscal resilience and sustainability (World Bank, 2023). Ghana and MMDAs have all poorly performing property tax systems will need to identify and implement the appropriate set of policy and administration reforms to improve tax base coverage, property valuations, billing, collection, enforcement, and taxpayer services. Doing so can help the country realize potential property tax revenues in a more equitable and efficient manner. Property-related taxes have a strong potential for revenue mobilization, especially in rapidly urbanizing areas.

In fact, urbanization is a wealth-creating process, causing rising land values, which, if appropriately captured, can provide funding for much-needed for both state and urban infrastructure and services. The property tax base is immobile, which minimizes economic efficiency implications and is considered the least distortive tax instrument followed by consumption taxes, personal income taxes and corporate income taxes, respectively (Johansson, Heady, Arnold, Brys and Vertia 2008).

Due to its immobility, the property tax base captures the value of location-specific capital investments and benefits from government programs and services not captured otherwise through various fees, user charges, and other taxes. This allows the property tax to operate as a form of “benefits tax,” allocating the tax burden across properties with differential benefits as reflected in differential property values. The immovable property tax base also makes it relatively easier to identify and capture the tax base and allows the property itself to be natural collateral in case of tax nonpayment.

The property tax base also tends to fall more on those with the “ability to pay,” as immovable property is often a primary repository of wealth. Finally, as a highly visible and politically sensitive revenue instrument, the property tax base can encourage more responsive, efficient, and accountable local governance and public service delivery.

2.0   Overview of Property tax in Ghana

Historically, property taxation in Ghana had significantly under-exploited, systemic challenges as well as lack of political will. The concept of a property tax has existed in Ghana since colonial days, although the structure of the tax has changed many times over the years. When Ghana gained independence in 1957 it sought the assistance of the United Nations (UN) to develop a uniform, equitable and sustainable method of property rating. The UN responded positively and a system based on taxing each property according to its replacement cost was recommended and adopted (Kusaana, 2015).

Property rating in Ghana, and for that matter the MMDAs, have been fraught with a lot of challenges. Meanwhile property rates, being one of the property taxes, is part of the most lucrative and promising means of mobilizing revenue at the local authority level, and yet the least tapped means of property tax revenue realization to support these local assemblies. Today, property rating in Ghana is governed by the Local Government Act 1993 (Act 462), which upholds this ‘replacement cost’ approach to levying properties (Commonwealth Local Government Forum 2018).

The approach calculates the rate impost as “the amount it would cost to provide buildings, structures and other developments as if they were new on an undeveloped land or site at the time the premises are being valued” (Section 96(10)[a]). Local authorities in Ghana are legally empowered to collect rate revenue due to them fully and promptly. This empowered position has not, however, translated into improved local tax performance. The heavy reliance on central government grants (leaving a very small percentage of sub-national revenue coming directly from local taxes) limits MMDAs’ ability to fund local development autonomously.

Property rate is a potentially attractive means of financing municipal governments in developing countries. As a revenue source, it can provide local governments with access to a broad and expanding tax base. However, the yield from property rate in the developing countries and for that matter Ghana is extremely low due to the approach adopted for the tax administration. In most countries, property rate administration is decentralized to local governments and Ghana is not an exception. The Local Government Act (1993) of Ghana, Act 462 gives the local assemblies the mandate to levy tax on properties within their jurisdiction.

The Government must reform property tax through effective rating valuation, reaffirming its legal mandate and showcasing the digital infrastructure and technical expertise available to support Metropolitan, Municipal and District Authorities (MMDAs). The objective must be clear: better data and well-defined processes are essential for building public trust and improving compliance. The local government in Ghana has a significant opportunity to generate substantial revenue from property owners and real estates developers but a major challenge remains the under-collection of property taxes. Many high value properties in Ghana contribute far less than their worth to local government revenue.

3.0 Challenges in Property Tax Administration in Ghana

At the country level, the property tax revenue can be benchmarked against a country’s GDP to gauge the overall property tax revenue contribution. As OECD countries typically have a property tax to GDP ratio of about 1.1 percent, with Canada, the United Kingdom, and the United States reaching up to 2.5 to 3 percent of GDP. Middle-income countries typically collect about 1 percent of GDP. Low-income countries may collect up to 0.5 percent of GDP, although many collect less than 0.1 percent of GDP. Kwakye (2010) reports that revenue from taxes on properties was 0.2% and 0.19% of Ghana’s GDP in 1997 and 1999 respectively, which are tiny fractions, but still much larger than in 2010. Recent estimates indicate that the share of property rates of GDP is less than 0.5% and accounts for about 14% of the total revenue envelop of local governments in Ghana (Biitir and Assiamah, 2015).

This strongly suggests that the huge potential of property taxes in Ghana is not being harnessed, and raises many questions as to why and how this situation arises. Previous research on property rates in Ghana has examined individual aspects: challenges in its design and implementation (Boamah 2013); the effectiveness of the government’s Land Valuation Division in discharging its mandate of property assessment (Petio 2013); and the prospects and problems of levying immovable assets and their impact on internally generated funds (IGF) (Kuusaana 2015)

First, Ghana’s property tax system is structurally undermined by political and elite influence, with wealthy beneficial owners often using their power to resist realistic property rate assessments. Because many politicians and elites control high-value real estate through proxies, trusts, or complex company arrangements, there is little political will to enforce property taxes. In Ghana political interference, unequal compliance framework and local elite capture are indeed major contributors to the poor performance of property taxes in the country. The specific challenges regarding politicians, political cronies and the elites include political patronage and interference, fear of unpopularity, and elite resistance.

Currently, politicians and appointees often shield wealthy property owners, political sympathizers and traditional elites from assessments or tax enforcement in exchange for political favour. The systemic issues driving this resistance include: Both major political parties have historically been reluctant to aggressively collect property rates—often termed “property taxes” or “property rates” in Ghana—fearing it will alienate voters or draw backlash from economic elites who possess the political muscle to resist payment. Local politicians and appointees often shield wealthy property owners, political sympathizers and traditional elites from realistic assessments or tax enforcement in exchange of political favour.

Powerful individuals often hide their ultimate beneficial ownership using corporate vehicles. While Ghana has introduced Beneficial Ownership transparency legislation to combat illicit financial flows and hidden assets, enforcement on real estate holdings remains heavily fragmented.  Economists and policy experts argue that while ordinary, middle-class citizens bear a heavy tax burden, the ruling class and affluent citizens frequently evade paying their fair share on prime real estate, leaving Ghana’s property-tax-to-GDP ratio exceptionally low. Fear of unpopularity of political parties have contributed to poor property revenue performance.

The sensitivity of local taxation causes national and local politicians to shy away from proper assessment of property values and strict collection measures, as it risks alienating local voters. Elite resistance in the local communities contributed significantly to poor property taxes. Property tax design and compliance mechanisms frequently suffer from elite design. Influential community members manipulate the system or exploit loopholes to minimize their tax burden. In this country. The class of the wealthy, famous and powerful persons have adopted arrogance of power and impunity when it comes to paying their share of realistic property taxes proportionately and equitably towards the development of our country as well as cities.

To a very large extent, the wealthy, class of tax avoiders or evaders are the same people who own significance of real estates in the country, residential, commercial and industrial properties as well as large tracts of lands in various parts in Accra, Kumasi, Sekondi-Takoradi, Cape Coast, Sunyani, Ho, Tamale, Bolgatanga and others. For example, in Accra, where most of the well to do as well as wealthy reside in the best or most affluent enclaves in the capital city, Trasacco valley, Cantonments, Labone, Ridge, Airport residential areas, Airport hills and Ambassadorial enclave of East Legon

The second being defaulters, many who are either unaware of the legal requirement to pay property rate, or simply disregard payment all together. Government institutions, which are by law not exempt from paying property taxes, have also been accused of not paying property taxes. Another challenge is a lack of enforcement and reprimands for wrongdoing. When individuals default in payment, the Local Governance Act, 2016 permits the sale of the defaulters’ property, a fine and even jail time at the discretion of the Courts when rates are not paid. However, this is not put in practice. The same reprimands are given to collectors who engage in fraudulent practices that may undermine collection of revenue. This lack of enforcement and poor monitoring encourages many to forgo payments and breeds collectors’ corruption

Third, property tax efforts and tax reform challenges showed that the country both the lacked of technical action and political will. However, there is a clear evidence indicates that tax resistance rather emanates mainly from ordinary citizens whose influence derives from the fact that Ghana’s de facto two-party political system has turned their national-level votes into tax resistance cards. Also, politicians and elites in the country are beneficiary owners of the property boom in the country and are not prepared to pay the realistic property taxes. It reflects the lack of power of the ordinary citizens who have no economic clout but who as a group, constitute an electoral powerhouse that political leaders ignore at their peril

Fourth, the lack of public service benefits not properly charged and captured through user charges are not often reflected (“capitalized”) in property values. Thus, the lack of public infrastructure improvements and other public services (such as location-specific social services), are not typically captured in increased property values as residents are not willing to pay higher property prices for properties with no improved accessibility, drainage, school options, medical facilities, street lights, and security, among others.

Thus, there is no connection between local, location-related services, and property values—which is why property taxes cannot be typically assessed on an ad valorem or value basis. When Ghanaian perceive this no connection between taxation and services, they are typically unwilling to pay their property taxes. In one sense, the property tax cannot be seen as simply a payment for local level public services, similar to purchases of goods and services within private markets, thus not helping to improve the efficiency link between the costs and benefits of public services. In addition, the property tax has not been excellent tax to improve the governance “accountability” linkage between local-level governments and their local residents.

Fifth, it is worth noting that the property tax in Ghana tends to be a politically-sensitive tax. As a direct tax, it is visible; tax payments can be quite “lumpy” and often bear little direct relationship to public service delivery. Tax administration can become costly, involving property information management, valuation, billing, collection, and enforcement, while the property tax liability largely falls on the property owner, and can also raise possible problems of asset-rich, cash-poor situations.

Sixth, the lacked of tax base definition in Ghana has been a major challenge in property administration: Property taxation policy begins with the definition of the tax base, identifying what is to be included in the tax base. While most countries include both land and improvements (which includes buildings), there are some countries which only tax land (for example, Jamaica, Kenya, Vietnam), while others only tax buildings (for example, Ghana, Haiti, Tanzania). Addressing these tax base definitions, improving collections, and increasing the frequency of property revaluations linked to market values would increase the property tax buoyancy. Some countries use indexation to keep their property values adjusted for inflation (Brazil, Colombia and Jordan) between the periodic property revaluations (Bahl and Vasquez 2007)

Seventh, in Ghana, particularly across Metropolitan, Municipal, and District Assemblies (MMDAs), limited administrative capacity and inadequate equipment are leading barriers to effective property rate mobilization. These operational deficits severely cripple local revenue generation. MMDAs revenue departments often lack the basic field equipment (e.g., vehicles, mapping tools, and IT infrastructure) needed to physically locate properties, deliver demand notices, and monitor compliance across sprawling municipal districts. Many Assemblies lack modern digital property cadasters and rely on manual, non-automated rate implementation systems, making it incredibly difficult to track rateable properties.  There is a notable shortage of professional valuation officers and trained revenue collectors, which results in inaccurate property assessments and a high reliance on inefficient manual collection.

Eighth, human resource capacity and innovative challenges in Ghana’s MMDAs. Enhancing the capacity of human resources and using some innovative practices for revenue improvement at the local government level is critical for maximizing revenue collection but the challenges persist. Ghana’s MMDAs are thought to have enough revenue potential but their inability to raise enough revenue is attributed to ineffective revenue collection mechanisms such as lack or ineffective use of revenue management software and electronic databases, fewer revenue collectors and poor training, ineffective monitoring and supervision and absence of property valuation data, among others. Lack of numbers, poor remuneration, lack of motivated staff, inadequate training and non-use of the state-of-the-art revenue management systems, including the ineffective use of POS devices, have contributed to the abysmal revenue mobilization performance of MMDAs in Ghana. These weaknesses often reflect in poor communication skills, unprofessional appearance of revenue collectors, poor record/bookkeeping practices, weak revenue collection strategies, unavailable or poor use of revenue management software systems, inability to reach many potential taxpayers due to the use of fewer revenue collectors and lack of sufficient and credible data for effective collection of revenue.

Ninth, in terms of tax equity, is the assumption that taxpayers are equally treated in the same situation of tax. The perception of taxpayers of the tax fairness affects the tendency for non-compliance. That is, if taxpayers think that the taxes are charged wrongly, they have the tangency to make tax evasion. When the taxpayers feel that tax is unfair, this result to the increase of tax evasion. Taxpayers’ poor perception of the amount of tax they pay is a problem with decentralized taxation.

To tax the taxpayer fairly is an indicator of a good tax system. In principle, taxpayers are to be taxed according to their ability to pay and comparing to the income they earn. When the taxpayers settle their tax payment in relation to their capacity to pay, they feel as they are giving sacrifice in giving taxes. If taxpayers feel they are paying higher tax in comparison to the income they earn, they may feel that they are exploited by the tax system present. The complicated tax system is considered by the taxpayers as another cause of the non-compliance of tax payment. People feel that when the tax system is complex, this influence taxpayers to break the rule

Tenth, the lack of taxpayers’ education on properties in Ghana refers to the widespread lack of awareness among property owners regarding property taxes (property rates) and rental income taxes. It includes a poor understanding of tax laws, payment procedures, deadlines, and the penalties for non-compliance. Many property owners fail to distinguish between confusion between property tax and rent tax. Property rates are annual levies on immovable property (land, buildings) collected by Metropolitan, Municipal, and District Assemblies (MMDAs) to fund local development while Rent Income Tax: A tax on the actual income generated from renting out residential (8%) or commercial (15%) premises, which is payable to the Ghana Revenue Authority (GRA). Studies show that more than half of property owners in Ghana are unaware of the basic property tax laws. Because taxpayers are unaware of their responsibilities or how the systems operate, compliance rates are extremely low. Historically, only a tiny fraction of total properties in Ghana have successfully been billed or paid property taxes, creating massive deficits in local funding.

When taxpayers do not understand the system, they struggle to navigate the processes. This increases their “compliance costs”—the time, stress, and sometimes financial loss incurred simply trying to figure out how to calculate their liability and pay their taxes without facing penalties. A critical component of taxpayer education is understanding how tax revenue translates to public services. Because there is limited education and visible feedback, many citizens assume their payments are mismanaged, which further decreases their willingness to pay.

Eleventh, lack of transparency and accountability in the MMDAs in the property tax collection. The lack of transparency in how tax revenues are used creates strong tax resistance among everyday citizens, who complain of receiving few visible local services such as fixed roads, drainage systems or proper sanitation.

Pertaining to transparency and accountability is one of the major factors responsible for the poor property rate performance of councils. The inability of local governments to provide even basic services heightens suspicion surrounding the accountability deficit) The lack of transparency and accountability in property tax collection within Ghana’s Metropolitan, Municipal, and District Assemblies (MMDAs) has historically been a significant driver of underfunded local governance.

This systemic issue stems from inefficient manual collection systems, a lack of clear auditing, and a lack of clear feedback linking tax payments to community development. The structural and administrative challenges related to transparency and accountability in property taxation include: In the past, reliance on paper-based billing and manual cash collection by local revenue officers created massive leakages. Funds often failed to reach the assemblies’ accounts due to non-issuance of receipts or unapproved collection channels: A primary factor undermining citizen trust is that many property owners do not see a direct link between their tax payments and improved local services, such as waste collection, drainage, or road repairs.

Many assemblies have historically operated with property valuation lists that were over a decade old, meaning assemblies collected a mere fraction of actual property values while new developments remained completely unregistered.  Elected assembly members and local officials sometimes hesitated to enforce tax laws, grant exemptions, or write off debts out of fear of political backlash during election year.

Twelfth, the centralization and subsequent decentralization of the property tax collection had caused confusion. Shifting collection responsibilities between the Ghana Revenue Authority and MMDAs had occasionally disrupted revenue mobilization and led to significant leakages and losses. The centralization and subsequent decentralization of property tax (rate) collection in Ghana caused widespread confusion because it disrupted local revenue streams, sparked legal and political disputes between central and local governments, and led to overlapping digital billing systems that left property owners unsure of who to pay. Historically, Metropolitan, Municipal, and District Assemblies (MMDAs) were solely responsible for property tax collection under Section 144 of the Local Governance Act, 2016 (Act 936).

Shifting this to the centralized Ghana Revenue Authority (GRA)—alongside private digital vendors—undermined fiscal decentralization laws. Property owners received conflicting bills and payment instructions from both local assemblies and the GRA’s unified portal (myassembly.gov.gh). This technological overlap, alongside disputes over newly assessed property valuations by the Land Valuation Division, resulted in low compliance and public frustration. Recognizing the dysfunction and loss of local revenue, the government suspended the GRA’s centralized vendor system and began returning the mandate fully to the MMDAs. This required assemblies to rapidly re-establish local revenue teams.

4.0 Conclusion

Property taxes in Ghana are widely considered a critical untapped revenue stream. Currently yielding less than 0.1% of GDP, they represent a major opportunity to bolster Internally Generated Funds. Unlocking this requires addressing historical undervaluation and low compliance through digital reforms, notably the centralized uniform common property rate uniform.

The government must urgently address all the challenges and issues raised as part of its strategic plan to reform the property taxes in the country. The government and the Ghana Revenue Authority (GRA) should urgently adopt initiative to bridge the property tax gap by integrating the Ghana Card, the Digital Property Addressing System, and the unified digital platform (accessible via MyAssembly Portal) to map properties and improve billing transparency.

The Government through the Ministries of Finance, Local Government and MMDAs must urgently leverage on the digital addressing system and the unique identification numbers (GhanaCard) to implement property tax system in order to improve on domestic revenue mobilization for both the MMDAs and Central government.

The importance of the digital property address systems could not be underestimated for the development of the Ghanaian economy as well as revenue mobilization for the MMDAs. It is very imperative that Ghana put in place a comprehensive digital address system. The Government through Ministries of Finance, Local Government, Religious and Chieftaincy, Ghana Revenue Authority and MMDAs require not only effective systems and data but also strategic navigation of political resistance, building public trust through transparency and visible service delivery, adapting technology to local contexts, and fostering collaboration across institutions and levels of government.

The hope of this paper is that local and national government, supported by researchers and civil society can maintain the momentum to create a fair, equitable and effective system of property tax in Urban cities in the country. Finally, as a highly visible and politically sensitive revenue instrument, the property tax base can encourage more responsive, efficient, and accountable local governance and public service delivery. To realize these potential property tax revenue improvements, Ghana must undertake strategic reform, combining policy and administrative interactions to improve tax base coverage, property valuations, collection, enforcement and taxpayer services.

The tax policy reforms must adjust tax base definitions and tax rate structures along with making appropriate policy decisions linked to valuation standards, appeals, collection and enforcement. The tax administrative reforms must focus on improving tax base coverage, valuation, and collection, along with taxpayer services (Kelly R., 2013). The District Assemblies in Ghana are required to provide administrative, fiscal, social services and amenities to their residents. These responsibilities have been increasing in nature as a result of the gradual decentralization of some of these responsibilities which hitherto were being performed by the central government.

5.0 Strategic Recommendations for Policy Direction

Countries such as the US and the UK generate 3% and 4.2%, respectively, of their GDP from property taxes; and the OECD countries average 1.9% of GDP from property taxes. As of 2018, Ghana’s property tax to GDP stands at 0.03%-0.05%. The Government and MMDAs must work hard to improve on the country from the dismal 0.05% of the GDP to a realistic level of 2.0% of GDP to support infrastructural development. The paper recommends further education on property tax and its concept to citizens highlighting the importance of property registration and identification using digital systems for taxation in order to augment revenue generation for both MMDAs and Central government.

First, after the implementation of the Digital Property Address System, the Ghana Card, and Mobile Money Interoperability, and after nearly eight years of painstaking work, Government must urgently put in place a Unified digital platform for property taxation which the Ghana Revenue Authority could roll- out together with the Municipal and District Assemblies. The Unified Digital Platform for Property Taxation includes the list and details of nearly over 9 million properties, uniquely identified by their addresses. On this digital platform, property owners can verify their property rates and pay same and receive receipts online. Also, the GRA and MMDAs may be able to see, in real-time, which properties have or have not paid their property taxes. This unified digital platform will significantly increase property rate collection and revenues. (His Excellency Dr Bawumia, 2023)

This is a major establishment that should help Ghana generate much needed revenue for both MMDAs and central government.

Second, Government must act to bridge the tax education gap. To fix this knowledge gap and modernize the collection process, the GRA and the government launched the Sustained National Tax Education Programme and unified digital platforms like the Unified Common Property Rate Platform to simplify billing and collection.

The Ghana’s property tax reform must be medium to long-term process where Unified Property Rate Platform must be developed.  A policy reversal on planned rates collection based on revenue sharing formula requires that assemblies continue with their respective revenue collections while remedial measures are being put in place under the ghana.gov or digital solution platform.

Realistic property taxes in large cities are among the ways to increase a government’s revenue. The property tax has tremendous potential for increasing revenues, along with enhancing governance accountability, efficiency, and equity. Government and local can optimize their taxation policy and improve tax administration to increase revenue with- out resorting to huge property tax rate increases.

Third, Ghana Revenue Authority must urgently continue with national initiative for which was put in place to educate and engage citizens on taxation from 2025 to 2028, with the aim of building a strong culture of voluntary compliance. The main goals of the initiative must increase taxpayer awareness, improve voluntary compliance, build tax morale and citizenship, enhance transparency and trust and institutionalise tax education. To create a tax – conscious country, where every citizen has knowledge and understanding, values, and fulfills their civic duty by contributing to national development.

Fourth, Ghana must fully capitalize on diversifying its tax revenue streams through the introduction of digitalized equitable property taxes. For example, Rwanda in 2019 implemented successful property tax regimes and environmental taxes, which have contributed to their higher tax-to-GDP ratios. Government and MMDAs must urgently resume the collection of property rates, while the State addresses the challenges associated with the use of the unified common platform capable of billing, collecting and reporting property rates nationwide. An effective property tax IT system must successfully integrate a series of interconnected functions: at a minimum, identification of properties, assessment/valuation, billing, payments, monitoring compliance, and providing taxpayer service.

It also needs effective coordination and cooperation between different ministries, departments agencies and different levels of government. Property and rent taxes also have the capacity to enhance domestic (local) revenue mobilization. For this reason, the Lands Valuation Authority has to make sure that the market value of all lands, houses, and other landed properties are determined at all times to support efficient property and rent tax mobilization.

As a matter of urgency, the government after long completion of national identification project, the streeting naming and property addresses the government should urgently embark on the property tax project. Credible tax regimes revolve around credible databases which in turn makes strategic revenue mobilization successful.  The completion of two national projects by previous government are very critical for efficient revenue mobilization, a vibrant economic sector, and development in general.

Fifth, Ghana’s property tax administration should be prioritized. Legal changes in policy can be effective but can require time and face delays in adoption; thus, priority could focus initially on improving tax administration, which alone can realize significant improvements in revenue, equity, and efficiency. In this regard, property tax administration should aim for coverage, valuation, tax liability assessment, and collections ratios closer to 100 percent. Property tax systems should adopt: (a) simplified data capture, data management, and tax mapping procedures to improve the fiscal cadastre coverage; (b) appropriate, simplified valuation methodologies to improve the level and relative equity of the valuation roll; (c) simplified tax rates and transparent tax liability assessment procedures to improve the accountability and accuracy of the tax liabilities; and (d) simplified and accountable revenue collection mechanisms, and effective enforcement systems to reduce compliance and administrative costs. Administrative procedures should be integrated into an appropriate computer-assisted administration system

Sixth, Ghana must digitize land administration nationwide: A nationwide land titling and registration program eliminated manual paper ledgers, creating a centralized database of real property that made it easier to identify owners and assess properties fairly

Ghana must digitalize its land administration countrywide to eradicate systemic bottlenecks like manual record fragmentation, rampant multiple land sales, and bureaucratic delays. By converting analog records to digital maps and platforms, the country seeks to secure property ownership rights, accelerate business registration, and improve overall public trust. Historically, reliance on paper deeds and unmapped boundaries has led to the notorious practice of individuals selling the same plot of land to multiple buyers. Digitalization, including the rollout of digital maps, secures tenure by clearly defining ownership and making land boundaries definitively verifiable.

Under the manual system, property registration in Ghana has been slow, pushing the country behind on regional “Registering Property” indexes. The transition to a centralized digital framework—like the Electronic Land Information System (ELIS)—eliminates physical bottlenecks, reduces human errors, and makes it possible to track transaction statuses online. Previously, accessing basic land services meant citizens and investors had to travel long distances to regional capitals.

Decentralizing these services into integrated digital systems allows authorized users across the country to access data, apply for titles, and manage properties far more conveniently. Inefficient land administration deprives local governments and traditional stools of vital revenue. Modernized and digitized land administration expands the tax and revenue base, encourages private sector investment, and drastically improves the ease of doing business in Ghana. Manual record-keeping leaves public lands vulnerable to unauthorized encroachment and dissipation by institutions. Digitization ensures strict tracking, authentication via secure systems (like QR codes), and strict adherence to regulations regarding state lands

Seventh, Ghana’s property tax policy cannot be changed overnight by passing a law and/or changing policy regulations. However, successfully implementing those policy changes into “realized” policy success requires sustained political will, operational and technical capacity, systems and procedures, funding, and time. These reforms are dynamic; thus, through an iterative adaptation approach, the government should be able to systematically monitor and periodically adjust the policy and related administration options to achieve expected revenue, equity, and efficiency objectives.

International experience suggests that nationwide property tax reforms can take from 1 to 5 years to realize sustainable results. A Strategic Implementation Plan, when designed well and implemented systematically, can assist the taxing jurisdiction in incrementally achieving its intended goals of improved revenues, equity, and efficiency.

Eighth, Ghana’s property tax reforms should be implemented in a comprehensive yet strategic manner. Property taxation is ultimately a revenue instrument, which should generate revenues as efficiently and equitably as possible while minimizing economic, administrative, and compliance costs. While analyzing the property tax system comprehensively, Ghanaian authorities including Ministries of Finance and Local Government, Ghana Revenue Authority and MMDAs must identify the specific areas of reform intervention and sequence those interventions to ensure the best results.

While improved property tax base coverage and the quality of the property assessment/valuation can increase the potential, only improved collection ultimately allows the potential to be transformed into realized revenue, efficiency, and equity objectives. Each situation requires an appropriate balance and sequencing of coverage-, valuation- and collection-related interventions.

The impetus for property tax reform can vary, emanating internally from within a local government or tax department to address revenue, equity and/or efficiency concerns or from concerns emanating from within a broader public sector management reform effort. Ultimately successful property tax reform must be designed to respond to and to leverage political and administrative reform moment effectively.

To the extent possible, for example, the property tax strategic plan should be linked to ongoing reforms that are improving transparent and accountable governance, citizen participation, and public services to help mobilize broad stakeholder support and link tax revenue mobilization and improved public services, both of which are important ingredients for encouraging voluntary compliance. It also may allow property tax reform to take advantage of the broader reform momentum, along with needed political, technical, and popular support, and access to human and financial resources. Property tax reforms can also be, in turn, a catalyst for and support towards the implementation of reforms in land and housing, public infrastructure, urban services, and broader taxation and governance.

Ninth, public education and taxpayer sensitization are very important for enhancing the capacity for revenue mobilization. Education and training are key to enhancing the quality and capacity of revenue collectors to carry out their routine duties.

It helps them to be able to issue receipts correctly and to do simple book-keeping of revenue collection activities. Sensitization enables taxpayers to understand their tax obligations, including when and how to pay their taxes and even how to calculate their taxes, where and to whom to pay taxes. Proper education and training and timely provision of relevant information regarding taxes ease stress related to planning and arrangements for tax payments.

There is the need to establish that there is a need for more taxpayer education and sensitization for better outcomes. Some of the taxpayer education and sensitization activities are usually carried out during town hall meetings, which are also found to be attracting low attendance. Some of the assemblies make use of the mobile vans for taxpayer education but this was also found to be largely ineffective.

Tenth, the MMDAs should provide further education on property tax and its concept to their citizens. This can be done through public and community education and sensitization programs. The focus should be on the need to pay property tax, the uses and importance, the legal perspective among other things the medium should allow for feedback.

The tax policies on property tax should be geographically neutral, and evenly distributed to eliminate the high fiscal disparities and the undesirable differences in the degree of revenue autonomy among localities. This is because local governments with less revenue autonomy are not able to exert more discretion in their expenditure decisions, and this might translate into lower ability to tailor the public service provision to the preferences of their community for property tax, thereby improving upon property tax and tax system for revenue mobilization.

The USAID Uganda Domestic Revenue Mobilization for Development project, implemented by Nathan Associates, sought to strengthen local revenues in 10 cities in Uganda, including Fort Portal, Mbarara, and Gulu. The primary revenue source for these cities is property taxes.

The first stage of the project was to build political support for a new system of valuations for properties. This was accomplished through three steps:

1. Streamlining communication between the political authorities and local revenue authorities. The mistrust and poor communication between political and technical leaders was seen as a factor hindering the efficiency of revenue operations. To address this gap, the project designed and delivered training, including on the management of revenue collection, to assist politicians and technocrats to better understand the roles and responsibilities in mobilizing domestic resources and developing a link between revenue collection and improved service delivery.
2. Supporting the 10 cities to design and implement domestic revenue improvement plans. Reform plans were set up in 10 cities for introducing new methods for improving tax compliance. These plans met with varying degrees of success in terms of formal approval by local councils, but all succeeded in identifying detailed strategies for enhancing local revenues. First, they designed and implemented systematic property valuation databases to increase local revenues. Second, they designed measures to institute transparency in local budgeting. Third, they improved service delivery by allocating additional local revenue collections towards social sectors and public services
3. These revenue improvement plans have been further supported by a campaign with civil society organizations to win taxpayers’ confidence and increase civic engagement (See, Mbarara city and property taxpayers). These plans were shared with the Ministry of Local Government to build a collective understanding amongst all parties. The second stage of the project involved improving the cities’ property valuation methodology and update the property tax valuation rolls. For this, the USAID-Nathan team identified and contracted three local firms capable of undertaking professional property valuation using geospatial information system (GIS) methodology, which entails using a computer-based system for the digital entry, storage, transformation, analysis, and display of spatial data. The newly designed valuations database for each city now shows each property with its GPS coordinates, satellite imagery of the property, and the full contact details duly verified for the owner of each property. These technologies have enabled expansions of the tax base in other countries as well.

For example, Liberia is improving tax collection using GIS to enhance detection and enforcement; Zambia is employing satellite imaging to map informal settlements for better land administration;  and France is using AI and detection technologies to increase the tax base.

As a result of these initiatives, the 10 Ugandan cities are already witnessing revenue gains. The total revenue collection in the 10 cities for the fiscal year 2018/19 amounted to UGX 20 million (USD 5.4 million) compared to UGX of 28.9 million (USD 7.8 million) in the fiscal year 2021/22 (Figure 2). A 26 percent increase in local revenues is projected for the current fiscal year. This projected rise in local revenues is on top of the expected revenue from the expanded base as the result of digitized property valuations

Key Pillars of Rwanda’s Property Tax Success

• Decentralization: Revenue administration was transferred to the local government level, supported by capacity-building initiatives to allow districts to independently collect and manage their own-source revenues.
• Integrated Valuation Systems: Properties were systematically valued based on market dynamics rather than arbitrary assessments, increasing the fairness of the tax burden and closing historical tax gaps.
• Streamlined Compliance: By minimizing face-to-face contact and allowing taxpayers to register, view assessments, and pay via mobile platforms, the cost of compliance was lowered, boosting public trust and overall compliance.

Property registries have long been a pillar of state capacity and a basis for private market activity. While registry establishment and operation traditionally were costly and time consuming, digital technology makes low-cost registry operation and wide outreach easier.

To guide developing countries aiming to establish such registries and measure progress, this paper develops indicators (in terms of digital coverage, interoperability, and property taxation for local service delivery and public land management) of effective digital registry service provision. Digital connectivity, interoperability, and remote sensing can profoundly change the coverage and usefulness of land registries. Connectivity allows to communicate directly with right holders, thus improving coverage with and content of rights; reducing the need for intermediaries when registering rights; and making information easier to access.

Interoperability can reduce costs of record maintenance; eliminate duplication and improve the usefulness of records for public and private purposes. Use of remotely sensed information makes data on land use easy to access, allowing use of such information to manage public land; develop and enforce land use regulations including by linking to mobility data transmitted by cell phones; and foster private contracts incorporating parcel-specific land use information. Rapid advances in AI and machine learning that can be deployed quickly and at scale suggest benefits from adopting digital records will accumulate over time.

Malme, J.H. and Youngman, J.M. 2001. The Development of the Property Tax in Economies in Transition. WBI Learning Resources Series, Washington, DC, World Bank

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