Thursday April 20 2017

Makindye buildings face closure over property tax


WAKISO. Authorities in Makindye/Ssabagabo Municipality have told landlords and other businesspeople in the area to pay property dues and avoid their premises being closed down.
The notice comes a few weeks to the end of the financial year 2016/2017.
According Mr John Byehangana, the Town Clerk Makindye Municipal Council, less than 50 per cent of Shs2.7 billion has so far been collected because many property and business owners are reluctant meet their tax obligations.
He said: “The financial year is coming to an end and we cannot afford to lose such taxes.”

Although the major focus is on property tax, Mr Byehangana said this new municipal council also targets revenue from trading licences, planning fees, markets dues, public health licences, local service tax, bill boards, court filing fees, inspection fees among others.
“We can do well if our people adopt the culture of paying taxes without necessarily being forced,” he said .
The deputy mayor, Mr Ben Kiwanuka, said lack of a robust enforcement team has impended revenue collection in the area which has consequently affected proper delivery of services.
“We have been operational for less than two years as a municipality and our enforcement team needs to be strengthened if we are to collect enough taxes,” he said.

Makindye authorities say they had planned to generate Shs500m from trading licences, Shs59m from billboards, Shs200m from occupational permits and Shs1billion from plan fees. However, only 40 per cent of this revenue has been collected so far.
With three divisions including; Ndejje, Masajja and Bunamwaya, the municipality’s total budget for financial year 2016/17 was Shs10.182 billion of which the municipality projected to collect Shs4.188 billion as revenue.
About 40 per cent of the money for the budget was expected to come from locally generated revenue and the rest from Central Government.

High rates
Recently, property owners in Masaka Municipal Council rejected the property rates set by authorities, saying they were exorbitantly high. This forced the authorities to suspend the new property tax rates.
Although municipal council authorities insist that the rates were raised from 5 per cent to 8 per cent, property owners claim the increment was 100 per cent compared to what they were paying previously.
Property tax is payable on income arising from the rental property.

This means that any person, company, group of persons organisation, charity and members’ club that owns property, rents out this property and derives rental income from the property is supposed to declare the rental income to town authorities or Uganda Revenue Authority and pay tax on that income.
However, the requirement to pay tax on rental income does not apply to organisations or individuals and companies that are exempted such as churches.