Mbale City suspends local revenue collection over graft

Mbale City Council has suspended collection of fees from street parking, loading and offloading and advertising fees over alleged corruption among officials.

Mr James Kutosi, the spokesperson of Mbale City, said the decision follows the continued failure by contractors to remit monthly local revenue collections to the council account.

“Those people have been collecting money from the utilities [markets, parks, among others], yet it is not reaching the city treasury,” Mr Kutosi said on Tuesday.

He added: “We call upon the public not to pay the taxes until further notice. Those who are still collecting the dues are doing it illegally,” Mr Kutosi said.

In 2021, the city rolled out plans to implement digital revenue collection to minimise leakages and increase revenue.

But the authorities have now said the Integrated Revenue Administration System (IRAS) is being manipulated by some officials.

IRAS is an online and mobile application platform to enable local governments and cities to collect revenue through registration.

Mr Kutosi said some contractors, in connivance with division officials, had also disregarded the directive of using electronic payment system and instead continued with manual receipts.

“The directive was that there is nobody who should pay money in cash. But these people are not paying using electronic systems. You find people with manual receipts. It means somebody is collecting money in cash and giving manual receipts,” he said.

Mr Kutosi said the council is supposed to have that money collected and remitted directly to a single bank account in Bank of Uganda.

He said the local governments or cities using electronic systems have had their revenue doubled but wondered why the system is not working in Mbale City despite its implementation.

The Monitor learnt that some people who collect dues from traders do not issue receipts but instead give them chits to confirm clearance.

According to the city council officials, people pay daily street parking fees ranging from Shs1,000 and Shs20,000.

Mr Steven Masiga, the director of Makerere University, Mbale branch, said the problem started with the council itself whereby officials were allegedly awarding contracts to their close relatives and friends.

“They need to streamline things because currently, they don’t have sufficient funds and it will be a typical disaster if they play around with a core source of local revenue like street parking and offloading,”  Mr Masiga said.

Mbale City deputy speaker Abdullah Magambo blamed the mess in local revenue collection on city technical authorities and said the suspension will cause more loss of income.

“This will create financial strain, making it difficult to meet operational expenses,” Mr Magambo said.

Ms Harriet Mutonyi, a retired accountant, said the city is losing millions of money because of fights and corruption.

“The city council should streamline revenue collection in the city, failure of which they will continue fighting and we will see nothing but less development,” Ms Mutonyi said.

Mr Wilson Lukaye, the youth councillor for Mbale Industrial City Division, said there is need for a forensic audit of local revenue in the city.

However, Mr Muhammadi Wafuba, one of those contracted to collect street parking dues, said they have not received official communication from the city regarding the suspension of their contract.

“We have a contract letter which gives us a tender running from July 12, 2023 up to June 30, 2024.  We have not received any termination letter. For us we are still working until our contract expires,” Mr Wafuba said.

Efforts to get a comment from Mr Odo Waiswa, who was contracted to collect money for advertising, and Mr Abdu Madoi of loading and offloading were futile by press time.

The Mbale City mayor, Mr Cassim Namugali, said the council collected only Shs320m in the last quarter out of the projected Shs1.5b.

“In the previous financial year, the council suffered a shortfall of more than Shs2b. We collected Shs900m out of the projected Shs3.5b,” he said.

In the Financial Year 2017/2018, only Shs2b was collected instead of the projected Shs3.9b.

Background

This is the second time Mbale City Council is suspending the collection of revenue over corruption and other related irregularities.

Last year, they suspended the collection of street parking fees over the continued fights between contractors. Companies, including Nalu Tours and Travels Limited, and Central Investments Agency Limited, fought for a contract of collecting the revenues on behalf of Mbale City.

In 2021, the former Minister of State for Economic Monitoring in the Office of the President, Mr Peter Ogwang, ordered for a forensic audit in the management of local revenue sources in Mbale City for the previous four financial years.

The directive followed accusations of mismanagement of local revenue in Mbale central market and under declaration of revenue.

[email protected]