An analysis of the impact of jurisdictional fragmentation on property taxes in Ghana
Journal of Financial Management of Property and Construction
ISSN: 1366-4387
Article publication date: 21 January 2021
Issue publication date: 27 July 2021
Abstract
Purpose
Following decades of weak financial capacity of local governments in raising enough revenues to finance their budgets, this paper aims to examine the impact of jurisdictional fragmentation on property taxes in Ghana. Since independence in 1957, many local governments in Ghana are yet to build their fiscal capacity to collect enough own source revenues to support their local budgets. All local government laws in Ghana have assigned property taxes to local governments.
Design/methodology/approach
The paper uses quantitative econometric techniques with local level panel data from 2010 to 2016 to examine the impact of fragmenting assemblies in Ghana.
Findings
The paper finds that fragmenting local governments have an overall negative effect on property taxes in district assemblies in Ghana. However, fragmentation of metropolitan assemblies has an overall positive effect on property taxes, relative to district assemblies. In the case of municipal assemblies, fragmentation has a net positive effect on property taxes but an overall marginally negative effect, relative to district assemblies. Also, the paper finds that grants, capital expenditure and administrative expenditure of local governments do not impact on the collection of property tax revenues in all types of assemblies in Ghana.
Originality/value
The paper concludes that relative to metropolitan assemblies, fragmenting districts assemblies is not congruent with government efforts to promote the collection of property taxes in Ghana.
Keywords
Acknowledgements
The author acknowledges the technical guidance from Prof. Augustin Fosu and Prof. Riel Franzsen, ATI, Faculty of Economic & Management Sciences, University of Pretoria, South Africa. Author is grateful for his PhD funding from University of Pretoria.
Citation
Oppong, F. (2021), "An analysis of the impact of jurisdictional fragmentation on property taxes in Ghana", Journal of Financial Management of Property and Construction, Vol. 26 No. 2, pp. 219-235. https://doi.org/10.1108/JFMPC-07-2020-0048
Publisher
:Emerald Publishing Limited
Copyright © 2020, Emerald Publishing Limited