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Local govts seek to maximise property tax collections to close revenue gaps
The Services and Fair Tax for Property Owners project seeks to increase property rates in cities such as Jinja. Photo / Phillip Wafula
What you need to know:
- The Services and Fair Tax for Property Owners project will be key in finding solutions to challenges such as low public confidence and understanding of the tax system
New cities are seeking to maximise collections from property taxes as one of the ways through which they can close revenue gaps created by an increase in funding priorities.
The move, funded by Usaid and implemented by RippleNami under the Services and Fair Tax for Property Owners project, will be key in finding solutions to challenges such as low public confidence and understanding of the tax system that continue to impact property rates compliance in Uganda.
The project is also being implemented as part of the domestic revenue mobilisation strategy, in which government has partnered with technology driven companies such as RippleNami to deliver solutions that will bring more taxpayers in the taxable fold.
In a report prepared by RippleNami with focus on Hoima City, it was noted that in the face of inadequate funding, many urban areas could not meet demands for infrastructural development and public services, resulting in an inability of authorities to deliver services that match the needs of the people.
Therefore, the report noted, there was need for increased engagement on the rights of property owners to service delivery, fair and equitable taxation. Hoima has already completed property valuations, targeting properties that will be taxed in the next five years.
In a statement, Mr Brian Kaboyo, the city deputy mayor, said during a civic engagement in Hoima City last week, that the city has a budget of Shs30b, of which Shs200m comes from property rates, trading licenses, and other taxes imposed on businesses within the city.
However, the collections, according to the Auditor General, are still too low to meaningfully impact the overall collections from cities across the country.
In the 2022 Auditor General report, it was noted that sprawling needs of cities, including infrastructure development and public services, have stalled due to insufficient funds, noting that all the 10 new cities had failed to implement approved city structures due to lack of funds.
In 2022, Parliament approved the establishment of 15 cities but only 10 were operationalised.
The Services and Fair Tax for Property Owners project seeks to uplift the ability of local governments to raise their own revenues, with property rates being a priority area for revenue collection.
