What you need to know:
Jinja City generates the largest share of revenue from property-related taxes, followed by Gulu and Masaka City, according to data captured during the 2019/20 financial year
At least Shs50b is generated from Property Tax annually outside Kampala Metropolitan Area, details from the Local Government Finance Commission indicate.
This is an average of 20 percent of the Sh250b generated by local governments outside Kampala Metropolitan Area, Local Government Finance Commission data shows.
However, at a performance rate of 30 percent, this is still below required targets even as government continues to come up with a number of measures that seek to push up property-related revenues generated outside Kampala Metropolitan Area.
Jinja City, data indicates, generates the largest share of revenue from property-related taxes, averaging at Shs1.6b.
It is followed by Gulu City at Shs1.1b while Masaka City average at Shs900m, according to data captured during the 2019/20 financial year.
In a brief shared in response to Monitor's inquires, the Local Government Finance Commission noted that all the above including others such as Mbarara, Mbale, Lira, Arua, Fort Portal, Soroti and Hoima cities are projected to return some good growth, given that they are being supported by government and development partners to prepare comprehensive valuation lists in regard to property tax collection.
Mr James Ogwang, the Local Government Finance Commission principal financial analyst and head of local revenues, last week told Monitor that there has been a noticeable pickup in property tax performance due to the fact that some new cities are now using their valuation rolls.
“But beyond this, there has been a lot of sensitisation conducted by government and other partners. At least many property owners [in areas governed by local governments] are now aware of why they should pay these taxes,” he said, noting that the collections have also been boosted by digitisation using the integrated revenue administration system, through which local governments have been supported to automate local revenue collections.
Government, through Ripplenami, with support from USAID through the Services and Fair Tax for Property Owners campaign, has also been working to ensure that property owners are engaged in discussions with authorities on how revenues generated from property rates are spent to benefit local communities as part of the Domestic Revenue Mobilisation for Development project.
A number of sensitization programmes have already been conducted in Mbarara City as part of the larger plan to improve the state of services as well as advocating for greater property tax compliance.
The campaign also seeks to call for accountability from authorities to ensure that generated revenue contributes to the provision of services.
Other sensitisation activities are expected in Hoima and Gulu, among other cities.
Mr Ogwang also noted that property tax continues to underperform due to ignorance of many property owners as well as failure of local governments to link service delivery to such taxes.
Property tax is managed under the Local Government (Rating) Act, 2005 and has been earmarked as a major revenue source for local governments, especially in urban local governments.
In Uganda own-occupied residential properties, which are estimated to be more than 60 percent of properties in urban councils, are exempted from paying property tax.
According to the Local Government Finance Commission, it is estimated that there are at least 250,000 property tax-rated properties, of which an average of about 70 percent are compliant.
Property tax is collected from rateable commercial properties, industrial properties, rented residential properties and central government properties for ministries departments and agencies not under decentralised ministries.