Embed Property Tax into ECG Bills to Boost Revenue – Professor Agbloyor

By Praisebell Rosemond Larbi

The Chair of the Research Committee of Tesah Capital, Professor Elikplimi Komla Agbloyor, has proposed that property tax payments in Ghana be embedded directly into electricity bills as a more efficient and sustainable way of boosting domestic revenue mobilisation.

According to Professor Agbloyor, relying on courts, inspectors and manual enforcement mechanisms has proven ineffective over the years, resulting in persistently low property tax compliance across the country. Embedding property tax into electricity billing, he argued, would transform collection from a legal enforcement challenge into a routine and predictable payment process.

He made the proposal in an article titled “Changing the Narrative: From Persistent Fiscal Deficits to Fiscal Surpluses Part II: Property Taxes.”

Professor Agbloyor explained that electricity services in Ghana already have near-universal coverage and established enforcement systems, making them a practical vehicle for tax collection. He noted that property owners ultimately remain responsible for electricity accounts, even in cases where tenants occupy the property, thereby strengthening accountability.

Under the proposed system, the property tax component would be added directly to electricity bills, with payments automatically split between the Electricity Company of Ghana (ECG) and designated tax accounts. Revenue collected would then be apportioned between the central government and Metropolitan, Municipal and District Assemblies (MMDAs).

“This transforms property tax from a legal enforcement problem into a routine billing process,” he stated.

However, Professor Agbloyor acknowledged that the success of such a system would depend heavily on ECG’s operational efficiency. He noted that inefficiencies within the power distributor could directly affect the level of property tax revenue realised.

“If we fix the number of properties and rental rates, the compliance rate and the efficiency of collection by ECG or any other means of collection becomes critical. I’m aware of the operational inefficiencies of ECG which can directly impact the realised property tax revenues,” he said.

He added that improving ECG’s operational efficiency should be a national priority, stressing that all stakeholders have a direct interest in a well-functioning ECG. According to him, increased efficiency at ECG would not only enhance electricity service delivery but also strengthen revenue mobilisation for both local and central government.

Sharing Revenue and Rebuilding Trust

To ensure fairness and strengthen incentives, Professor Agbloyor proposed a clear revenue-sharing formula for property tax proceeds. He suggested that 60 per cent of the revenue should go to MMDAs, with the remaining 40 per cent allocated to central government.

Importantly, he recommended that the central government’s share be ring-fenced into a dedicated Roads and Infrastructure Fund.

“One reason citizens resist taxes is the perception that revenues disappear into general budgets and that the funds may be siphoned away by corrupt politicians. Visible earmarking for roads and local infrastructure can help rebuild trust in the fiscal social contract,” he observed.

Using conservative assumptions, Professor Agbloyor estimated that Ghana could generate approximately GH¢14.5 billion annually from property taxes. He noted that while Greater Accra and Ashanti regions would dominate collections due to higher housing stock and rental values, all regions would contribute meaningfully under a properly structured system.