Twerefou: Property tax will sustain government's social programmes

Accra, May 4, GNA-An Economist has called for vigorous pursuit of property tax as a means to sustain government's social programmes such as=

the Capitation Grant, School Feeding Programme and the Livelihood Empowerment Against Poverty (LEAP).

Dr. Daniel Kwabena Twerefou, Senior Lecturer at the Department of Economics, University of Ghana, Legon, who espoused the socio-economic benefits of the programmes, said the property tax had the potential to ra= ke in enough revenues to help government increase its social spending in a m= ore efficient way.

He was speaking on Tuesday to journalists in Accra at the end of a public lecture, sponsored by the United Nations International Children Fu= nd (UNICEF) on the effects of the global economic crisis on child poverty in=

Ghana.

Dr. Twerefou observed that property tax revenue mobilization in the country was ineffective due to weak monitoring and collection mechanism t= hat existed in the bodies mandated to collect the revenue.

He said high tax rates and weak enforcement of the law were incentiv= es for tax defaulters to carry out the illegality adding, "may be there is t= he need to take a look at the law again to ensure compliance. If taxes were reasonably low and the enforcement was high and strongly implemented, it would serve as an incentive for many to pay them."

Dr. Twerefou expressed worry that proper valuation on property had n= ot been thoroughly and properly done claiming there still existed many communities and households left without having been valued to meet modern=

estimations. He said property tax would be an effective way of ensuring that the rich who have acquired properties were made to assist the poor in society= .. Mr. Antwi Asare, a Lecturer at the Department of Economics, Universi= ty of Ghana, Legon, was of the view that the LEAP programme should be refine= d with effective 'checks and balances' implemented to ensure that it functioned well. "Some poor households are not perfectly targeted under the programme= .. Those who deserve to be under the programme do not benefit, the loopholes=

would have to be removed to ensure that those deserving really benefit", he said.

Mr. Asare said the purpose of the lecture was to shed some light on the potential impact of the current global economic crisis on the child's wellbeing and to bring to the attention of policy makers proposed alternative policy options to protect the development of children. He said the lecture was based on a simulated impact of two counter-cyclical stimulus programmes entirely financed from external sour= ces that aimed at protecting children from the negative effects of the global=

economic recession.

The programmes, he said, included food price subsidy financed from external sources amounting to one per cent of Gross Domestic Product (GDP= ) and cash transfer worth one per cent of GDP to poor households. Mr. Asare said two additional domestically-funded policy responses w= ere simulated and they included cash transfers financed from import taxes on some specific items such as rice worth 0.5 GDP and cash transfers to poor=

households financed from property taxes also worth 0.5 per cent of GDP. He said the results of the simulated study showed that "households a= re getting poorer. Children are getting hungrier and are increasingly participating in the labour market. The children are also getting less quality healthcare."