Monday September 11 2017

City traders protest unreceipted rental fees

Traders stand outside Money Centre arcade in

Traders stand outside Money Centre arcade in downtown Kampala. When the new property tax is effected, KCCA will collect more than Shs50 billion annually. PHOTO BY MICHAEL KAKUMIRIZI 


Kampala. Kampala City traders are bitter with their landlords over unreceipted rental fees, which they claim has on many occasions resulted into double payment, making them incur losses.
The traders, especially those operating in arcades, told Daily Monitor that some of their landlords never issue receipts to acknowledge rent payment but rather give them small chits to show that they have cleared.

This habit, traders alleged, has been going on for many years despite tenancy agreements made between two parties which stipulate that rent must be receipted.

Ms Jalia Nakalema, a trader who preferred not to disclose her working place for fear of being victimised, said that such a habit by landlords keeps traders tense because they are never sure whether they wouldn’t be asked to pay rental fees for the second time as there is no valid proof for the first payment.
“I pay rent of Shs3m but whenever I pay rent, I am given a chit acknowledging only Shs1.5 with a word cleared written on it,” she said as she displayed the chits.

She added: “I have on several occasions clashed with my landlord for asking rent for the second time yet in actual sense I cleared but I wasn’t given a receipt. Government should really help us speak to our landlords.”

Daily Monitor understands that majority of landlords fear to give out receipts of the actual rental fees paid by their tenants to avoid being overtaxed by Uganda Revenue Authority (URA) and Kampala Capital City Authority (KCCA). Whereas KCCA collects property tax, URA collects income tax.

Mr Godfrey Katongole, the chairperson of Kampala Arcade Traders Association noted that when landlords evade taxes by declaring false returns from their properties, government collects less revenue and hence the burden is passed on to traders who are asked to pay a lot while clearing their merchandise at URA.

“If we are paying the whole amount of rent as per our tenancy agreements with our landlords, why do they refuse to declare the returns to URA and KCCA? This burden comes back to us, and many of the traders have been duped by landlords who don’t give out receipts. We have petitioned the President on this matter,” he said.
Mr Vincent Seruma, the URA spokesperson acknowledged that landlords under-declare returns and he noted that it denies government revenue.

“A new law is coming up to control landlords from under declaration of returns on their property and charging exorbitant rental fees. We are hopeful that the law will help us as far as collecting tax is concerned,” he said in a phone interview.
KCCA acting director revenue collection Fred Andema said the authority determine property tax basing on the average rental value and not declarations from landlords.