Govt Sole-sources Multimillion Property Rate Contract to Private Company with no history
Dec 30, 2022 8:27 AM
The Ministry of Finance has contracted a private company with no track record on sole-sourcing basis to collect and manage the entire Property Rate Administration of the whole country.
This comes after the Ministry of Finance created the impression that it was rather contracting the Ghana Revenue Authority GRA to collect the rates on behalf of government in direct contravention of the Local Governance Act 936.
Whereas MyNewsGh.com is keeping the details of the said company shelved for now, available details suggest the sole-sourced service provider lacks any track record and was selected without any competitive bidding to get value for money advantage for the state.
Despite the millions covering the contract, the Service Provider is also now relying on the Assemblies Human Resources to execute the terms of the contract with the Finance Ministry.
Also, the Ministry of Finance signed a contract with the company worth millions when GRA could have undertaken same if not the empowering of the Assemblies to collect their own money.
Under the terms of the said contract, 30% of the property rates collected by this private service provider through the common platform will be remitted to MMDAs while the remaining 70% will be shared among the Ghana Revenue Authority, the Ministry of Finance and the service provider on an unfavourable basis.
While the Local Governance Act 936 mandate the Assemblies as the only body to collect the property rates and to contract any third party to collect the revenue on their behalf, the government has gone ahead to literally “take away” a chunk of revenue base of the Assemblies.
The Ghana Statistical Service estimates listed structures at 10, 661,421, according to data obtained from the 2021 Population and Housing Census.
Currently, residential properties are classified into 1st class, 2nd class and 3rd class. First class properties are valued higher than 2nd class and 3rd class properties as a build-up on work done by Germany’s GIZ through a District Local Revenue (dLRev) software still in use.
The property rate is charged on a portion of the estimated value of the property called the rateable value. The Local Governance Act, 2016 (Act 936) defines the rateable value of a premises as the replacement cost of the buildings, structures and other structural development that comprises the premises after the deduction of the amount it would cost at the time of valuation to restore the premises to a condition in which they would be as serviceable as they were when new.
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