Economy

    Assemblies spend GHS 22.4 million to collect GHS 10.26 million in revenue

    Auditor-General's report reveals significant inefficiencies in local revenue mobilization across Ghana's metropolitan, municipal, and district assemblies.

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    Assemblies spend GHS 22.4 million to collect GHS 10.26 million in revenue
    Ghanaian metropolitan, municipal, and district assemblies (MMDAs) spent GHS 22.4 million on salaries for revenue collectors between 2021 and 2025. These officers generated only GHS 10.26 million from property rates, fees, and licenses during the same five-year period. This stark imbalance, revealed in the Auditor-General's reports, points to significant inefficiencies in local revenue mobilization. The Auditor-General's findings show that individual revenue collectors often earned annual salaries between GHS 50,000 and GHS 90,000. However, they mobilized only GHS 6,000 to GHS 40,000 in revenue. This practice directly contravenes Section 52 of the Public Financial Management Act, 2016 (Act 921), which governs the use of public funds. It results in avoidable financial losses for the assemblies and undermines value for money. This persistent issue fits into a broader narrative of fiscal challenges and accountability gaps within Ghana's public sector. Local revenue generation is crucial for MMDAs to fund essential services and development projects. The inability to efficiently collect these funds places a greater burden on central government transfers. This also limits the autonomy and effectiveness of local governance structures across the country. Albert Kungmaa Ziem, a tax practitioner and lawyer, stated that these findings represent a serious breach of fundamental tax administration principles. He explained that it is economically unjustifiable for the cost of collecting taxes to exceed the revenue generated. Mr. Ziem emphasized that Ghana would be better off if the state did not spend more to collect less, highlighting the administrative irregularity. This situation demands immediate and decisive action from central and local government authorities. MMDAs must implement stronger monitoring and accountability mechanisms for revenue collection. They should also explore modernizing revenue collection methods, including digital platforms, to reduce human intervention and associated costs. Failure to address these inefficiencies will continue to drain public resources and hinder local development efforts. The Auditor-General has issued repeated warnings and recommendations over the past five years. Despite these, the desired impact on revenue mobilization has remained disappointingly limited. Many affected MMDAs continue to retain revenue collectors whose salaries exceed their generated revenue. This anomaly persists despite clear audit recommendations to rectify the situation. The government must enforce compliance with audit findings to ensure fiscal prudence. In 2021, 163 revenue collectors at 31 assemblies were paid GHS 3.04 million in salaries. They mobilized only GHS 1.63 million in revenue, leading to a GHS 1.41 million shortfall. The trend worsened in 2024, when 245 collectors at 55 assemblies received GHS 11.74 million in salaries. They collected only GHS 4.78 million, creating the highest shortfall of GHS 6.96 million. This consistent pattern underscores the urgent need for reform in local revenue administration. The identified assemblies include Asunafo South, Berekum, Dormaa Central, and Kumasi Metropolitan Assembly (Manhyia South Sub-Metro). Others are Talensi, Jomoro, Adansi Asokwa, and Sekyere Central. The widespread nature of the problem across numerous MMDAs indicates a systemic issue rather than isolated incidents. This calls for a comprehensive review of the entire local revenue collection framework.

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