Districts feel pinch of low revenue collection

Vendors in Ibanda market in January 2021.  Markets are some of the facilities local governments collect revenue from. Photo/Rachel Mabala 

What you need to know:

  • District leaders say several activities have been put on hold while others have suffered budget cuts due to poor revenue collection.

Several districts countrywide have failed to hit revenue collection targets due to a number of challenges, among which include the Covid-19 pandemic.
Additionally, activities of many local governments have suffered budget cuts due to lack of resources.
Local revenue constitutes about 2 percent of a district’s annual budget and failure to realise it affects implementation of activities locally financed.
 In the 2020/2021 Financial Year, Lyantonde District had projected to collect Shs179m from local revenue but got only Shs71m  due to the effects of Covid-19 confinement measures.

 As a result, the construction of Lyakajula Secondary School in Lyakajula Sub-county and Kashagama Secondary School in Kashagama Sub-county, stalled due to lack of funds.
 The poor revenue collection also affected the construction of many community access roads in the district and as such many are in a sorry state.
 Just like other districts, Lyantonde is financed by conditional and unconditional grants from the central government, donors and locally generated revenue from taxes, fees, licences and market dues.

 Mr Alfred Mutebi, the Lyantonde District vice chairperson, said the district revenue dropped partly because of the continuous outbreak of Foot-and-Mouth (FMD) disease which has resulted in the closure of cattle markets. 
“Lyantonde wouldn’t be doing poorly in tax collection, but we are disturbed by FMD which saw our biggest cattle markets closed,” Mr Mutebi said.
 Cattle markets are the biggest revenue sources for Lyantonde.  For instance, Kyemamba and Kashagama markets alone generate Shs34m every month.

Way forward
 However, Mr Mutebi said the district has formed a revenue committee to help identify new potential revenue sources. The committee is supervised by the Chief Administrative Officer (CAO).
 To boost the local revenue base, he said, the district would soon begin renting out some of its property including houses.

 The Chief Administrative Officer of Kabale, Mr Edmund Ntimba, said poor local revenue collection due to Covid-19 lockdown has slightly affected service delivery in Kabale as technocrats were not able to monitor the ongoing central government funded projects.
 However, despite the challenges, Mr Ntimba said several government projects such as the construction of Buhara Seed School, Kitooma and Buramba Health Centre IIIs and pit-latrines in different primary schools were completed.

 The Rukiga District LC5 chairperson, Mr Robert Mbabazi Kakwerere, said  poor revenue collection has not affected service delivery in their area because several projects were financed by the central government.
 His Kisoro counterpart, Mr Abel Bizimana, blamed the poor revenue collection on the country’s poor taxation policy.

 “Some government agencies such as the Uganda Revenue Authority are collecting taxes from shopkeepers whom the local government also targets for trading licences and it makes taxpayers develop a negative attitude that leads to tax evasion,” he said.
  The Tororo District chief administrative officer, Mr Dunstan Balaba, said implementation of most locally financed projects in the last financial years stalled due to inadequate funds.
  Mr Balaba said before the Covid-19 outbreak, Tororo District had anticipated to collect Shs2.3b from local revenue but only realised Shs938.8 million.
 “We have running projects but unfortunately we have recorded a drastic decline in local revenue collection. Can you imagine that we held a budget conference and we realised that the collection had dropped to Shs695 million?’’ Mr Balaba added.

 “You will be surprised that I pay my district councillors Shs50,000  per sitting and transport refund of Shs30,000 of which sometimes they sit in arrears. Even the previous councillors left council while demanding their arrears. Thank God that most of them never made it back otherwise some of them would take us to court,” he said.

 Also, following the outbreak of coronavirus in the country in March 2020, the share of the national budget allocated to local government programmes reduced to 9 percent from 10 percent in the previous financial year.
 The money was reduced to enable the country to battle the pandemic that has so far killed more than 3,300 people and infected more than 145,900 others.
 Mr David Kennedy Odongo, the Alebtong LC5 chairman, also the chairperson of all the nine district chairpersons in the Lango Sub-region, said the country cannot realise any efficient service delivery because of the budget cuts.

 “Meeting expectations with a meager budget is next to impossible,” he said.
 The Katakwi  District LC5 chairman, Mr Geoffrey Omolo, said: “2020 and 2021 have been the years of gambling. We hope this global pandemic is brought under complete control.”
Mr Simon Nangiro, the president of Moroto Development Forum, said although affected by Covid-19, the money which municipalities and town councils collect from local revenue is sent to Kampala as per policy.
 “And what is brought back to help in the implementation of the projects at the districts and the municipalities is very little,” he said.
 Mr Ismail Mohamed, the mayor of Moroto Municipal Council, said: “We are appealing to the government to allow us to utilise the revenue that we collect so that we can be able to implement some of the projects in our area.”
 The Hoima City mayor, Mr Brian Kaboyo, said they are finding it hard to implement some activities that get a vote from local revenue.

 In the last quarter of 2020/2021, Hoima City had projected to collect Shs500m from local revenue but due to Covid-19, they realised only Shs200m.
 “We use local revenue to collect garbage in the city and you can’t suspend such an activity. We have decided to adjust on some of the planned activities to see that we continue operating,” Mr Kaboyo said.
 The chairperson of Bigodi Town Council in Kamwenge District, Mr Adolf Magoba, said their biggest tax base was on tourism and during the peak of the pandemic, the tourists cancelled their visits.

 He said before Covid-19, they could collect about Shs7.2m in a quarter but currently they collect between Shs1m and Shs1.5m only.
 “Our town council largely depends on local revenue collected from local tourism because we are bordering Kibale National Park. We now depend on emergency funds we lobby from different ministries,” Mr Magoba added.
 Mr David Kor, the chairperson of Kanara Town Council in Ntoroko District, said floods and Covid-19 pandemic affected their local revenue collection.
 Mr Kor revealed that fish markets which used to generate Shs12m in a quarter are now giving them only Shs2m.

 “For loading and off-loading at the landing sites, we used to collect Shs9m but it has now reduced to between Shs1m and Shs2.5m,” he said.
 Mr Aron Turahi, the Isingiro District LC5 chairperson, said they were unable to fund council meetings because of the limited resource envelope.
 “The district public accounts committee could not meet because they are funded by local revenue, and the district land board sat only twice last year which affected service delivery,” he said.

 The Rubirizi District LC5 chairperson, Mr Sylvester Agubanshongorera, acknowledged poor revenue collection has crippled service delivery.
 “We did not do capacity building, we are facing difficulties in trying to maintain our roads,” he said.
 Ms Jemmimah Tumwijukye Buhanda, the Sheema District LC5 chairperson, said: “The district is facing challenges in paying councillors’ allowances because 20 percent of local revenue is used for paying them, monitoring of government projects and maintaining feeder roads.”
 
Technology & innovation 

 Meanwhile, Gulu City Council has embarked on digital revenue collection. The measure is aimed at ending tendencies of corruption among officials and also boosting revenue collection which has significantly dropped since the country went into Covid-19 lockdown in March 2020.
 Mr Alfred Okwonga, the Gulu City mayor, said the new initiative will enable them to spend less on human resources.

 “Human resources usually consume more than half of the revenue collected leading to poor service delivery to the community. We are looking at alternatives that are easily accessible to taxpayers and the tax collectors,” he said.
 Mr Christopher Opio Atekere, the Gulu LC5 chairman, said sub-county and parish chiefs had faked receipts for themselves to benefit themselves.
 Mr Walter Akena, a researcher, said local governments can eliminate corrupt practices during revenue collections but asked the authorities to create more revenue streams to boost collections.
 
Compiled by Bill Oketch, Fred Wambede, Joseph Omollo, Cleophas Tukamarwa, Robert Muhereza, Emmanuel Arineitwe, Leonard Mbishinzimana, Alex Ashaba, Steven Ariong, Simon Peter Emwamu, Ismail Bategeka, Felix Ainebyoona, Milton Bandiho, Elly Karenzi, Taibot Marko & Tobbias Jolly Owiny
 

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