State Minister for Local Government Jennifer Namuyangu has said since the powers of local governments were returned to the central government, they cannot raise 10 per cent of their budget from the local revenue they collect.
The minister made the revelation during the launch of the Local Economic Projects (LED) in Kampala yesterday, which aim at increasing tax revenue for the local government through involving different stakeholders on the ground such as private sectors and local investors.
Speaking to the media after the function, Ms Namuyangu said the current state of local government revenue worries them, adding that it is the reason they have come up with the LED project to enable them work with different stakeholders to increase their tax collection.
“The government has launched LED project in two districts and one municipality, including Mukono, Mpigi and Makindye Sabbagabo in Wakiso District. The districts have for long been depending on the central government and some reached the extent of getting 98 per cent of their budgets from the central government and they generate only two per cent, which is unfair,” she said.
She added: “We are pleased that Uganda Local Government Association (ULGA), in partnership with Local Government Common Wealth Association (LGCWA), have come up with an innovation to support the three local governments to see that the policy and issue of LED is taken up.”
She said the project will guide local government officials in coming up with policies and strategies and also support them to attract local investors and the private sector to partner with the local governments establish Small Medium Enterprises (SMEs) to erect factories that will create jobs hence improve people’s incomes and local revenue.
ULGA secretary general Rose Gamwera said the main purpose of LED project is to help the local government work with the national LED policy to build their capacities and to help them understand the concepts around it and how to put it in practice.
“For a long time now, we have looked for so many strategic ways of helping local governments work with the LED policy and we concentrated a lot on political and administrative decentralisation. But it is now time to grow our economies and we need money to do it,” she said.
She added: “Local governments have capacity to increase their revenue but they still have some gaps, including human resource and funding because at the end of the day, we have policies to implement from the government and LED is one such policy.”