Local Governments (LGs) are local because they are nearer to the people than any other government. LGs should, therefore, be positioned and connected to serve efficiently, effectively, appropriately and, respectively under strict accountability directives to the local citizenry and central government.
I read with dismay in the media that district chiefs contend that bringing residential properties into the tax loop will help mitigate financial constraints hampering service delivery in Local Government in Uganda. This is terribly horrible!
Whereas Local Governments are mandated to supply service delivery to the local citizenry in Uganda, they must serve with adequate resources to remain meaningful and relevant to the communities they serve.
Central government prescribed three strategic grants to finance service delivery in LGs in Uganda namely; conditional, unconditional and equalisation grants, which apparently translate into a meagre 15 per cent of the national budget.
This funding position is too poor and unacceptable given the nature and scope of work surrounding LGs as the closest allies and governments to the local citizenry.
Inadequate revenue bases, systemic weaknesses, poor pay, corruption, political influence and delayed financial remittances are some of the strategic challenges confronting LGs in Uganda.
Perpetual existence of these challenges and many more without corresponding remedies, deter the spirit of creativity, motivation and consistency, and is, therefore, prone to continued backwardness of the Ugandan communities for which the LGs are mandated to serve.
Bad roads, chronic community poverty, infrastructural gaps, food and income insecurity, aggravated crimes and social evils, poor socio-economic management are some of the highlights of a poorly managed and wanting LG structure.
The proposal by the district chiefs to introduce taxes on residential houses as a conduit to increase district revenues and service delivery is good and bad. It is good in the sense that it’s easier to implement and achieve significant results given the vast number of residential houses traceable in each district LG.
In the words of the Minister of Local Government; imposing a tax on residential properties would in effect turn houses into a financial burden. It will discourage the local citizenry from owning houses and it may deter the present rapid transformation of the housing sector in Uganda.
The public may fully embrace any new taxes levied on earnings rather than any properties in the quick and ambitions reach of the tax planners and policy implementers.
The underlying question to ask policy crafters is; why would a third world country like Uganda establish and encourage a purely spending LG system depending largely on grants and gifts as a means of transforming communities for sustainable development?
Below are some of the purely distilled and practical strategies for developing capacity in LGs. Central government is urged to copy and develop the following:
• Mandate the district Local Governments to craft strategic investment plans aimed at generating local revenues to steadily supplement the central government aid. Central government should position itself to financing these plans in the short and medium terms as a pilot study initially.
• Amend the Local Government Act and certainly the Constitution to allow LGs become investment clubs/hubs for Uganda as part of their core mandate. This is aimed at generating employment opportunities and revenues at local levels.
• Increase the LG share of the national budget from 15 per cent apparently to 50 per cent. This is because LGs carry the biggest burden of planning, implementing and delivering services to the majority of the local citizenry of which Central Government is voted into power to serve. A 50/50 budget share or even higher should, therefore, be embraced as a constitutional standard for resource allocation and distribution.
• Strategic partnerships and exchange programmes. Central government in conjunction with other LG sector players should undertake an action based study in best practice countries to copy, develop and domesticate into Uganda such findings/ best practices.
Mr Nsubuga is a researcher on Local Governments, Public Sector Management Scientist and Executive Director of African Business Foundation.
Nsubuga Mukedi Administration