Bloomberg report: In Ghana, collecting tax starts with distributing addresses

In a country where most households and businesses either don’t know their address or claim not to have one, Ghana’s government is starting afresh to compile a database that will not only make it easier to locate people, but also boost the collection of taxes.

Ghana is planning to identify and register every household and business, and give them an address, President Nana Akufo-Addo said in an emailed statement on Wednesday.

While Ghanaians are accustomed to using landmarks such as trees or traffic lights to indicate the location of a property, such an informal system isn’t conducive to the delivery of services and efforts to broaden the tax base, Akufo-Addo said.

“The Kofi brokeman seller and ‘that big tree at the junction’ have become reference points for giving out locations,” he said, referring to informal peddlers of popular dishes whose stalls line the streets in villages and cities.

“Today marks the end of an era and the beginning of a new one. Every property in Ghana will have an address.”

Unique Identifier

The National Digital Property Addressing System will assign a unique identifier to every property, Akufo-Addo said. The database will assist traders and businesses to access banking services, and make it easier for the state-owned utilities to track down their customers, he said.

“Once your address can be located, the risk premium charged by banks will be lower,” Akufo-Addo said. “Businesses can now produce at lower costs, and will have enough funds for reinvestment.”

The roll-out of the plan comes as the government is also introducing a national identification system to formalize the economy. The informal nature of Ghana’s economy has been a major constraint to economic growth, Akufo-Addo said.