Twenty-two metropolitan, municipal, and district assemblies (MMDAs) have been cited for inefficient tax collection.
The Auditor-General’s Report provides insights regarding the audit of the metropolitan, municipal, and district assemblies (MMDAs) for the previous financial year.
The assemblies received GH1.3 million in revenue between January 2022 and December 2022, while also paying 129 revenue collectors GH2.4 million in salaries.
Due to the fact that the collections only covered 55.02 percent of the collectors’ salaries, there was a shortfall of about GH1.5 million.
The assemblies include Sefwi Wiawso in the Western North Region; Juaboso, Bodi, and Amenfi West, all in the Western Region; Garu in the Upper East Region; Kpandai, Gushegu, and Chereponi, all in the Northern Region.
Others are Fanteakwa South and Upper West Akim in the Eastern Region, Nkoranza South and Pru-West in the Bono East Region, and Dormaa East and Banda, both in the Bono Region.
The rest are Adansi Asokwa, Asokore Mampong, Kwadaso, KMA (Manhyia South Sub-Metro), Sekyere Central, Asunafo South, Tano South, and Tano North districts and municipal assemblies, all in the Ashanti Region.
Last year, the 16 regions had 261 assemblies in operation due to the addition of the Guan District Assembly in the Oti Region.
They were made up of six metropolises, 107 municipalities, and 148 districts.
Out of these, 259 assemblies complied with Section 80 of the Public Financial Management Act, 2016 (Act 921) and submitted their financial statements for audit.
The defaulting assemblies were Shai Osudoku in the Greater Accra Region and Central Tongu in the Volta Region.
Set revenue targets.
Of the assemblies that submitted their financials, it was detected that 129 collectors in 22 assemblies were paid salaries of GH2.4 million, but the mobilized revenue was GH1.3 million, representing 55.02 percent of their salaries.
It is in spite of Section 52 of the PFMA, 2016 (Act 921), which requires the principal spending officer of a covered entity to institute proper control systems to prevent losses and wastage.
Contrary to the regulation, the report noted that three assemblies, including Sefwi Wiawso, Juaboso, and Bodi, paid salaries of GH160,061.76 to eight revenue collectors against their revenue collection of GH49,162, representing 31 percent of the salaries paid, which resulted in a shortfall of GH110,899.76.
The Auditor-General recommended to the management of the assemblies that they set revenue targets and enforce their agreement on the payment of salaries commensurate with collections.
It also asked that disciplinary action be taken against non-performing collectors.
Prevention of losses
Section 52 of the PFM Act, 2016 (Act 921) requires principal spending officers to institute proper systems to prevent losses and wastage.
In violation of the PFM Act, the Auditor General said five revenue collectors of Amenfi West Municipal Assembly were paid a salary of GH 150,061.23, but they were able to collect GH 57,374.87 in revenue, representing 38 percent of their salaries and a shortfall of GH 92,686.36.
Non-taxed revenue
Regulation 46 of the PFM Regulations, 2019 (L.I. 2378) requires the principal spending officer to ensure non-taxed revenue is efficiently collected.
“We noted that three revenue collectors of Garu District Assembly were paid a total annual salary of GH56,415.22. However, they were able to collect only GH11,737, resulting in a negative variance of GH44,678.22,” the report said.
“All three revenue collectors blamed the anomaly on the unwillingness of business operators to pay their levies.
There is, therefore, no value for money in the collection of the revenue,” the report found.
The Auditor-General, therefore, recommended to management that they ensure that the revenue collectors are effectively supervised and that the underperforming collectors be reposted to other districts where they would be effectively utilized.
Revenue performance
The review of the performance of revenue collectors revealed the poor performance of eight collectors in Garu and Kpandai.
Total salaries paid to them from January to December 2022 were GH138,227.45 against revenue of GH42,086 collected for the same period, representing 30 percent of their salaries, resulting in a shortfall of GH96,141.45.
The report said the situation undermined the achievement of value for money as well as a loss of funds to the state.
The Auditor-General also noted that three revenue collectors of Chereponi District Assembly were paid salaries of GH68,311.52 for the period under review, but they were only able to collect GH24,143, or 35 percent, of their salaries, leaving a shortfall of GH44,168.52 to the assembly.
“We, however, noted that 13 revenue collectors of two assemblies, consisting of Fanteakwa South and Upper West Akim, who were paid salaries of GH328,538.11, only collected GH105,915 revenue, or 32.24 percent of their salaries,” the report stated.
Abysmal performance
Analysis of the revenue collection of two assemblies, Nkoranza South and Pru-West, revealed the abysmal performance of 24 revenue collectors.
They received GH316,986.69 as annual salaries as against collected annual revenue of GH128,672.60, representing 41 percent of their salaries and a shortfall of GH188,315.09.
Management could not provide the cause of this infraction, the report noted.
“We recommended that management of the two assemblies set and enforce targets for revenue collectors,” the report added.