ULGA Calls for Reforms to Enhance Local Revenue Collections by Local Governments

The Uganda Local Government Association (ULGA) has highlighted a number of reforms that should be implemented to cause a steady increase in local revenue collections.

This was in response to the report that was early this week released by Action Aid International Uganda which revealed that there has been a significant reduction in revenue collection across all local governments in the country and this has been partly due to the COVID-19 pandemic.

The report noted that over all, in the financial year 2019/20 only 54% in local government posted an increase in revenue collection of only 5%.

Addressing journalists in Kampala, the ULGA Vice President Eastern Region, Patrick Kayemba noted that despite Local governments being affected by the COVID-19 pandemic, the Central government should consider establishing and implementing a national local revenue mobilization policy and strategy of local revenue collections are to be enhanced.

Kayemba said that since the suspension of graduated tax in 2005, Local Governments have seen their locally raised revenues drastically reduce.

“Today, most Local Governments are not able to raise more than 5% of their locally raised revenue as a proportion of their budgets. This is at a time when over 90% of the funds Local governments receive from the central government are sent with conditionalities,”Kayemba said.

He has thus called upon government to support automation of all registers, charging, and collection of levies, taxes and fees in Local Government and build capacity in use of innovations for local revenue collection.

The Vice Chairperson Western Region, Patrick Besigye said that there is need to review and enforce the amendment to the Uganda Revenue Authority Act to make it responsive to the Local Government Act clause on remittance of Agency fees to LGs.

“There are legal frameworks especially among key central government institutions including Uganda Revenue Authority (URA), Uganda Wildlife Authority (UWA), National Forestry Authority (NFA) and others that are not in tandem with the Local Government Act making enforcement of local revenue collection difficult. We act as agencies for tax collection but the agency fees prescribed by law is never given to us,” Besigye said.

He added that there is need to invest in property assessment and surveys to expedite rating and compliance in payment of property fees.

ULGA argues that Local Governments have limited logistical, technological and human resource capacity to enforce collection of local revenues since most of the revenue sources are in urban areas (towns, municipalities and cities) leaving District Local Governments with meager revenues to meet an overwhelming service delivery burden for a population that is increasing at a rate of 3% per annum.

They also decried the continuous political pronouncements on identified potential tax resources which have greatly affected the tax base for many Local Governments.