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Effective revenue mobilisation, prelude to success of MMDAs

The former President of United State of America Abraham Lincoln described democracy as government of the people, by the people and for the people.

This implies people are the owners of the process of democratic governance and must fully partake in it.

It is part of the reason that in Ghana the decentralisation concept has been initiated.  The idea is to cede governance to the grassroots through the Metropolitan, Municipal and District Assemblies (MMDAs).

 Indeed, the Central Governments cannot directly govern and ensure development to the people.

The assemblies are, therefore, tasked to implement or carry out policies and programmes and promote good governance at the grassroots.

There is no doubt that the ability of MMDAs to ensure good governance and development is contingent to a large extent on effective mobilisation and utilisation of revenue.

MMDAS at different levels have the responsibility of mobilizing revenue in order to meet the needs of the citizenry in terms of providing public goods and services, as well as ensuring the well being of their citizenry.

Most assemblies in Ghana have had problems concerning residents’ tax compliance, explaining why they unduly depend on statutory allocations from the central government.

Probably, in Ghana, it is only embowered assemblies such as the Accra Metropolitan Assembly (AMA) and Kumasi Metropolitan (KMA) that are capable of surviving without statutory allocation from the central government.

MMDAs are required to adopt strategies to enable them to achieve high level of revenue mobilization, in efforts to ensure sustainable development.

Local Governance

In 1988, the Provincial National Defence Council (PNDC) established the decentralisation process in Ghana by providing the legal and institutional direction to constitute the first district assemblies.

The decentralisation is to ensure that governance get to the population whilst development is evenly distributed across the country.

Challenges of revenue mobilisation at the local assemblies

Lack of political will is a major hindrance to revenue collections within the districts. The head of the local assembly is the Chief Executive. He has the authority to lead the assembly. The Chief Executive is directly charged with the duties of the assembly, which includes revenue mobilisation.

 There are laid down procedures governing revenue collection, including legal action. The Chief Executive does not wield power or does not have the political will to prosecute defaulters, and revenue mobilisation suffers.

Chief Executives are not able to do that due to political interference from the central government or political parties.

Some people, who default in the payment of assembly revenues are linked to political parties thus making them “untouchable”, thereby affecting  the operations of the assemblies.

Education

Another challenge affecting the rural areas has to do with inadequate knowledge on local assembly activities.

Some people are not abreast with the importance of revenue mobilization and the use of those funds. This makes it difficult for residence to willingly pay dues to the assembly. There is a general perception that they do not know what the monies collected are used for.

Religion

Ghana embraces various religions, predominantly, Christianity, Islam and African Traditional Religion. Some people owe allegiance to the religious groups than the central and local governments, and find it difficult to pay fees and taxes to the assemblies

Cultural

In the past it was partially the responsibility of the people to develop their communities. They played active roles in rendering services to their communities.

Things have been more formalised and civil servants working in these areas are to ensure security and provision amenities are projects.

Some people are still hooked on to the old concept of communal development, and do not see the need to pay money for projects to the assemblies.

Culture plays a key role in a people’s socio-economic and political development. Some people are not willing to spend money on projects they are not directly part of.

The role of PERC in revenue mobilisation

In order to improve revenue generation capability of the assemblies, both in the urban and rural areas, the political, education, religious and culture challenges must be addressed.

From the head of the assembly to opinion leaders in communities, there must be a consented effort to improve revenue mobilisation.

Suggested solutions:

There must be political will to enforce the laws of the assembly by the Chief Executive Officers .Legal means should be applied to properly collect revenue.

The media, especially community radio and Television stations should educate the people on their tax obligations.

Conclusion

The ability of MMDAs to mobilise revenue is key to ensuring sustainable development in the communities.  It is for this reason that the assemblies must put in place more effective systems to generate more revenue for the provision of amenities and development.

By Michael Quaique

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