Until recently, the mandate to administer property rates and their collections was assigned to the local authorities/Municipalities.

The property rate administration, collections and compliance have nonetheless posed enormous challenges to these local authorities.

No doubt, each of them will have their own story to share.

Although these local authorities perceive this “elusive tax” as the largest source of revenue for social and economic development, the question remains if they have effectively managed the administration of this tax and the collection thereofto yield the expected results.

With effect from January 1, 2023, the Ghana Revenue Authority (GRA) has partnered with the Metropolitan, Municipal and District Assemblies (MMDAs) to collect property rates using a Unified Common Property Rate Platform.

The Unified Common Property Rate Platform, Myassembly.gov.gh, is an end-to-end district revenue collection and administration platform for property rates, which is linked to the Ghana.gov.gh payment platform.

This article explores the expected roles and responsibilities of MMDAs, GRA, and Property Owners/Ratepayers.

Property rate collection under the local authorities

What was the purpose of this Rate, and why were the local authorities assigned to handle its administration and collections?

As per the Local Government Act, 2016, Act 936, the Rateempowers local authorities to generate revenue, fund governance, establish equity, aid economic development, and control compliance and administration.

Ratepayers pay taxes to finance local government services like schools, fire, police, garbage, libraries, recreational parks, streetlights, and sewer systems.

However, the intended purpose of these taxes remains unclear, and continued payment may be insignificant if the social and economic benefits appear insignificant.

Act 936 aims to give local authorities autonomy over property rate administration and collection to support local communities.

They should act as custodians of the tax having anunderstanding for local needs, priorities, and market dynamics.

Unfortunately, these local authorities have faced challenges in updated valuations, data management, compliance, tax base expansion, public awareness, capacity, resources, and political policy, highlighting the complexity of property rate administration.

To overcome these challenges, municipalities must invest in systems, build capacity, engage stakeholders, and improve administration processes.

Overwhelming responsibilities and population expansions require updating property values and efficient local authorities, and government review of outdated policies may help reach targets.

Property rate collection under Ghana Revenue Authority

As indicated, the introduction of GRA as collection agents for the municipalities has been fraught  with mixed feelings among all Stakeholders.

Ratepayers, who should have been considered as the ‘revenue clients’ appear to have been completely ignored when these major decisions were being taken.

Bearing in mind that property values are not absolute, the values keep changing with varying situations, which ultimately hinders the budgeting of any municipality, one would have assumed that the rate payers at least would be consulted extensively in such a major policy shift.

Ratepayers are increasingly confused about contacting designated authorities for assessment-related issues, and 9 out of 10 do not know how the rate impost (tax rate) is derived and its impact on property rate bills.

With  GRA taking  over the collection of rates for the municipalities, might  they  face similar challenges as experienced by the local authorities?

Is  the  GRA  bound by the same statutory provisions in  ACT 936 as sole agent of collections? Which accounts would the new agents deposit the property rate proceeds into since by law GRA is supposed to make all deposits into the Consolidated Fund for national development?

Naturally, like any institution jumping on the boat for the first time, the GRA would have to understand and appreciate the new terrain they are in.

Some of the challenges GRA may face  are,  coordination with the Municipalities, data accuracy & property valuations, compliance and enforcement, capacity & resources, and political & policy considerations. Furthermore, in the event of a change in government, would the new government  appreciate the existing role of GRA in their collection efforts or would they seek to reverse the role to the municipalities?

The Property RatePayer

In all this, how is the property owner or ratepayer affected?  

Ratepayers should focus on property assessments, as only The Lands Commission’s rating division conducts valuations. They can contest new assessments, request revised bills and refunds, regularly examine property record files to identify over-assessments and challenge them effectively, or apply overpayments to future rates.

There are five (5) circumstances in which one can have substantial evidence for a compelling case:1. If the assessed value of a property is too high. Thisindicates a higher percentage of value than other similar properties on the valuation roll.2. If property is assessed at higher percentages than permitted by law.3. An unequal assessment, which occurs when the property is valued above market value. Assessing a property below market value is illegal, and it is unequal if the assessment exceeds market value.4. Check for errors on your property record file since errors are notoriously common.5. Exemptions or deductions allowed on the property. E.g.vacancies, depreciation, and functional obsolescence making a property less desirable to own.

If you fit into any of the five categories, you may have a reason to  appeal your assessment value.

Property Rate Administration under the current dispensation

For many years, the local authorities have tried their hands on this “elusive tax system” and yet have not yielded the desired results expected in the local communities.  

GRA should assist municipalities in rate collection, leveraging existing infrastructure and expertise for efficient, timely, accurate payments, and reduced administrative burden.

So, what is the way forward for GRA to succeed in this regard?1. Setup coordinating systems with Municipalities – GRA should establish an efficient coordinating system with Municipalities and Valuation Authorities. A clearer understanding should be established that their intention is  not to take away the  mandate from the local authorities but only to assist in the rate collections efforts so the communities could be empowered to developed rapidly in line with changing times.2. GRA must clearly outline the changes – GRA must outline changes in their new role as collection agents, including revised payment systems, updated deadlines, and enhancing transparency and compliance for the public.3. GRA to address non-compliance & penalties – GRA must explain non-compliance consequences, penalties, and late fees to ratepayers, encouraging timely compliance to avoid negative consequences.4. GRA to address FAQs & concerns – GRA should offer a platform for property owners to address questions and concerns about the new system.5. GRA must promote awareness and education – Thecontact information for GRA and authorities should be provided for ratepayers seeking clarifications and assistance, including helpline numbers, email addresses or the designated offices for ratepayer support.

 In conclusion, property rate administration requires a multifaceted approach, with ratepayers playing a crucial role in supporting local development. Local authorities must prioritize accountability, responsiveness, and public engagement to build trust among property owners.  

There is no doubt that the rates would have a positive impact on the community. With all stakeholders prepared to work together whilst embracing their respective roles responsibly, the communities stand a greater chance of developing. GRA, we wish you luck!

Source: GraphicOnline