A Review of the Provision on Capital Improvement in Ghana’s Local Real Estate Tax Manifesto

Kwasi Gyau Baffour Awuah and Felix N. Hammond

Journal of Real Estate Literature, 2022, vol. 30, issue 1-2, 94-117

Abstract: Although a potential to improve revenue mobilisation of local authorities, it is claimed Ghana’s local real estate tax provision on capital improvement is a penalty on land development. This work evaluates the claim in the context of equity and economic efficiency. Findings from the work support the claim. Compared with undeveloped lands particularly in cities, the tax is discriminatory to capital improvements, which situation could incentivise investment in undeveloped lands and be a potential cause for a lot of undeveloped lands, uncompleted and leap-frog developments in cities. It is also not neutral and diminishes the return on capital and the capacity of landlords to keep their buildings in constant repair thereby discouraging capital improvement on land. Coupled with factors like the current poor tax collection, this could affect the revenue mobilisation and socio-economic development efforts of local and central governments. Thus, the tax policy stands a plea for a reform.

Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:taf:rjelxx:v:30:y:2022:i:1-2:p:94-117

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DOI: 10.1080/09277544.2022.2093820

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