Lack of taxpayers’ data in districts shrinks revenue

URA team inspect an impounded truck carrying 398 bags of rice concealed among packs of salt in Mukono . Government plans to support local governments to establish a database for revenue resources. Photo by STEPHEN WANDERA

KAMPALA. Districts are struggling to raise revenue because they lack proper records of eligible taxpayers, making it difficult for them to collect even a quarter of what they are supposed to, experts from the local government technical wing have noted.
According to the presentations made by the local government technical team, the districts, which have since grown to more than 100, collect less than they should because the taxpayers are unknown.

In his presentation last week in Kampala, the principal economist for Local Government finance commission, Mr Johnson Gumisiriza, said lack of data on who is eligible to pay local taxes is a problem at the districts. As a result, no district collects more than three per cent of the anticipated collections except for the urban areas (Municipalities) that are able to generate up to 20 per cent which, according to Mr Gumisiriza, is still low.
“The problem is insufficient data and poor records,” Mr Gumisiriza said during a stakeholder’s dialogue organised by Southern and Eastern African Trade, Information and Negotiations Institute (SEATINI) Uganda to discuss opportunities and challenges of revenue generation, allocation and utilisation at the Local Government.
In an interview, Prof Mwambutsya Ndebesa of Makerere University, said the districts collections are so dismal, showing how weak the decentralisation system has since become.

“One to three per cent total collection is unacceptable. But part of the problem could be fairness issues and patronage,” he said:
Ms Nelly Busingye, the programme officer SEATINI-Uganda, said the institution’s research shows that the districts have huge potential but must be helped to tap it due to several reasons including capacity issues, something she said the institute is working on especially in the north.
She said the institute believes that unless the districts collect what they ought to and properly account for it, delivery of services will always be insufficient.

Amount of taxes
Money URA is expected to collect. In this financial year 2014/15 (July 2014 to June 2015), the tax body is expected to collect Shs9.5trilllion.