Kumasi, Ghana’s commercial center, is the most populous city in the country. However, the Kumasi Metropolitan Assembly is currently seeing difficulties in assessing and collecting revenue from land properties and businesses, allowing it to access only half of the potential revenue from these taxes. In addition, the manual collection of taxes as well as the storage of data in different offices and sites make it difficult to consolidate exhaustive information for the calculation, collection and declaration of the tax.
By joining the ASToN network, the City wishes to focus on the issue of local tax collection, allowing it, in the long term, to invest more in its underfunded public services, and thus improve the quality of life of citizens on a daily basis.
Kumasi in figures
- Population: 866 268 inhabitants
- Surface area: 78,28 km²
- Population density: 11 066/km²
- Local authority budget: 6,6 million USD and 35 million GHC
- Smartphone penetration rate: 40-60%
- Internet access rate: 40-60 %
- Online platforms: Local authority website - Twitter, Facebook, WhatsApp
What does the city mean by “smart city”?
For KMA, a smart local authority is one where Services are ICT- based, with a centralised database that is accessible to all its units. This would make it possible for citizens to access information or make payments, for example, without travelling to the office premises.
Kumasi’s chosen policy area is E-Tax
The KMA currently finds it difficult to assess and collect revenues from prop- erties and businesses, particularly because the unavailability of approved local planning schemes makes it difficult to identify them at the correct rate. This means that the authority is only able to access approximately half the potential revenue from these taxes.
Additionally, tax collection is done manually, which makes it difficult to collect and report on tax. Data storage is also a major problem within the Assembly, with available data stored in different offices and locations, which makes the gathering of comprehensive information for tax assessment, collection, and reporting very difficult.
There is particular anxiety within the KMA that an inability to increase their revenue through taxation will make current development gains unsustainable when development finance leaves the region.
Findings: the starting point for addressing these problems
The following findings set out the starting point for Kumasi as they work to address tax collection. Based on research conducted over the course of Phase 1, they describe the interlinked strengths and challenges that need to be taken into account.
The city authority has a clearly defined problem with high-impact potential
The KMA has a detailed understanding of the challenges and barriers to address the issue of tax collection. Additional revenue collection could cata- lyse improvement in other public services.
Kumasi has strong capacity to attract partnerships outside of the local ecosystem
Kumasi has a good track record working with donor organisations and tech partners (such as Heinz Integrated Systems). However, there have been lim- ited working relationships with the tech & start-up ecosystem present within Kumasi that could be utilised.
Strong political commitment to the project must be matched with the improvements in public administration
While the Mayor has identified Sustainable Digital Revenue Mobilization as one of his priority areas, KMA is yet to put in place measures to address it’s complicated decision-making processes, with multiple layers of administra- tion systems, and data that exist in silos at different offices.
The KMA has limited capacity to engage with the collection of data
Data collection in the KMA is mostly paper-based and siloed, with little-to-no sharing between departments. Furthermore, there is no policy to ensure data completeness or regular updates, and the last full property audit was done in 2010. Finally, there is inadequate IT infrastructure to support data collection and storage.
Digital solutions could improve a confusing system but may not overcome citizen preferences surrounding taxation
In Kumasi, the presence of multiple billing and communications systems are very confusing for citizens, and there is potential for digital technology to improve the public offering in this regard. However, any solution must con- sider the preference of some citizens to use cash payments when paying their taxes.