Govt urged to prioritise property tax for revenue generation

An associate professor of finance at the University of Ghana Business School (UGBS), Prof. Elikplimi Komla Agbloyor, has called on the government to prioritise property tax as a key strategy for increasing national revenue. 

He believes that with proper implementation, property taxation could significantly strengthen Ghana’s tax base and provide the necessary funds to drive national development.

Currently, property taxes are paid annually, with payment deadlines varying by Metropolitan, Municipal and District Assemblies ( MMDA). Property tax rates range from 0.5% to 2% of the assessed rental value. 

According to Prof. Agbloyor, Ghana has a vast number of properties that could be taxed, offering the government an opportunity to generate substantial revenue without overburdening other sectors of the economy. 

He emphasized that implementing property tax at a reasonable rate would ensure fairness, while maximising revenue collection.

In an interview with the Graphic Business, he commended the government's decision to reintroduce property tax and increase the percentage, highlighting its potential to serve as a sustainable source of income for the nation.

"Property tax should be a priority, as the finance minister aims to generate revenue from it for the country. This is a positive step, given the vast number of properties in Ghana that can be taxed. 

By consolidating them under a unified system and determining appropriate taxes for each, the policy can be highly effective. Parliament should take the necessary steps to implement this initiative, ensuring a steady source of income for the country," he said.

Mobile money taxation

Prof. Agbloyor also shared his views on the government’s broader taxation policies, particularly criticising the taxation of mobile money transactions, known as the E-levy. 

He emphasized that the levy did not generate substantial revenue and should never have been introduced in the first place.

The e-levy, which was introduced in 2022 to widen the tax net, faced strong public resistance. Many Ghanaians considered it a regressive tax, particularly affecting low- and middle-income earners who rely on mobile money for financial transactions. 

The government has since announced plans to review and potentially abolish the tax as part of broader economic reforms aimed at improving the business climate.

In 2024, the Ministry of Finance projected E-Levy revenues of GHc 2.1 billion. By the first half of 2024, the levy had generated GHc 810 million. 

These figures indicate that while the E-Levy has contributed to Ghana's revenue, it has not met the initial ambitious targets set by the government.

"Mobile money transfers should never have been taxed in the first place, as their impact was negligible and they did not generate significant revenue for the country. 

We look forward to seeing real economic value and hope that the economy thrives under this government, given its strategic economic plans. By unifying all businesses under a single tax framework, government revenue will increase, especially once the E-levy is abolished as promised," he said.

Borrowing and corruption measures

Beyond taxation, Prof. Agbloyor emphasized the need for the government to take stronger measures in combating corruption. 

He described corruption as a major financial drain on the country and urged authorities to implement more effective anti-corruption policies.

He stressed that unless the government ensures that public funds are utilised efficiently, any revenue generated from property tax or other sources could be mismanaged. 

He called for increased transparency and accountability in financial governance to prevent wasteful spending and enhance economic stability.

Additionally, he advised the government to borrow responsibly, ensuring that loans are used for infrastructure projects that will generate revenue and contribute to long-term economic growth. He cautioned against excessive borrowing that does not yield tangible financial benefits for the country.

"I urge the government to borrow responsibly and invest in infrastructure projects that will generate revenue for Ghana and contribute to long-term generational wealth, the government must make a strong effort to combat corruption as it significantly impacts the country’s finances. Effective measures should be implemented to put an end to it," he said