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An analysis of the impact of jurisdictional fragmentation on property taxes in Ghana

An analysis of the impact of jurisdictional fragmentation on property taxes in Ghana 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/approachThe paper uses quantitative econometric techniques with local level panel data from 2010 to 2016 to examine the impact of fragmenting assemblies in Ghana.FindingsThe 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/valueThe 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. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Financial Management of Property and Construction Emerald Publishing

An analysis of the impact of jurisdictional fragmentation on property taxes in Ghana

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Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1366-4387
DOI
10.1108/jfmpc-07-2020-0048
Publisher site
See Article on Publisher Site

Abstract

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/approachThe paper uses quantitative econometric techniques with local level panel data from 2010 to 2016 to examine the impact of fragmenting assemblies in Ghana.FindingsThe 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/valueThe 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.

Journal

Journal of Financial Management of Property and ConstructionEmerald Publishing

Published: Jul 27, 2021

Keywords: Ghana; Local government; Fractionalization; Jurisdictional fragmentation; Own source revenues; Property taxes

References