Local Government Revenue Essay

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2.3.2 Sources of local government revenue in Ghana The main sources of local government revenue in Ghana include rates, lands, fees and fines, licences, rent, investments and grants Rates Property rates entail a substantial part of the total revenue for local assemblies, but the collection of property rates is often not efficient. This is a common problem not only for Ghana, but for many developing countries. The basis for the rate is the resident adult population and immovable properties and the property rate is levied on immovable property (Yeboah and Johanson, 2010). Licences According to Yeboah and Johansson (2010) licences are based on economic activities in the district; this licence serves as the permit for undertaking…show more content…
Hence, users of these facilities pay for the usage of these facilities. Rents are also collected from hiring of market stalls/stores, Assembly quarters etc. Fines include court fines on people who violate the Assembly’s bye laws (Kelly et al., 2001). 2. 3.2.4 District Assemblies’ Common Fund The District Assemblies Common Fund (DACF) is an additional source to the internal sources of revenue which is embodied in the 1992 constitution of Ghana and implemented for the first time in 1994. It is the largest source of revenue for the Assembly and contributes about 75% of the annual revenue of the Assembly and other funds released to MMDAs from Central Government. The fact emerging from the analysis above is that much of the funding received via central government transfers, including DACF, is earmarked in some way and, as a result, MMDAs have little flexibility over how the funding is spent. The monies received for salary payments, which is the majority of the funds received by MMDAs, is for staff in decentralized departments who report directly to sector

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