The Local Government Finance Commission (LGFC) expects the revenue collection by local governments to increase to Shs1 trillion by 2026.
The revelation was made by the Chairperson, LGFC, Isaac Musumba while meeting the Committee on Public Service and Local Government on Tuesday, 18 July 2023.
He said that the estimated revenue in royalties is Shs50 billion, property rates at Shs200 billion and Local Service Tax is Shs150 billion.
Other sources include, trading licences expected to collect Shs80 billion, market dues Shs100 billion, parking fees Shs100 billion and Shs320 billion will be collected from other sources.
“While the local governments have collected Shs256 billion, LGFC has projected the local governments can collect Shs1 trillion in the next two years, if some measures are implemented for local revenue administration and management,” Musumba said.
He said that among the measures the LGFC intends to implement to achieve the local revenue performance are completion of roll out of the Integrated Revenue Administration System (IRAS) in 52 local governments and Kampala Capital City Authority (KCCA).
“When the commission is availed the respective financial resources under the Development Plan Implementation Programme, it will facilitate the implementation of the IRAS at a cost of Shs1 billion a year,” he said.
Musumba also urged Parliament to push for recognition and application of the commission’s statutory mandate during budget formulation.
“The commission should be allowed to present its budget without alteration to Parliament. That will address its budget requirements of wage, non-wage, recurrent and development to effectively perform its mandate,” said Musumba.
Committee Chairperson, Hon. Martin Mapenduzi however, decried the low revenue collections, saying that the revenue generated is not more than five percent of the total projected collections.
“You find a district which has a budget of Shs35 billion, they are collecting Shs200 million; even in districts where markets have been constructed by government, there is no change. You want us to give you more money, you should also show that you are putting in effort,” said Mapenduzi.
Hon. Susan Amero (Indep., Amuria District) blamed the challenges faced by the commission on the Ministry of Local Government, saying that the ministry has taken over the mandate of the LGFC.
“Take a step and face the President [President Yoweri Museveni] and tell him what it is supposed to be. We know that Local Government Ministry has decided to take off some of your powers that you cannot have money because they want to manipulate you,” said Amero.
The Local Government Finance Commission is mandated under the Constitution of Uganda (1995) and the Local Government Finance Commission Act (2003) to advise the President on all matters regarding transfer of resources from the central government to local governments (and allocation to each local government) and to advise local governments on matters relating to revenue from sources devolved to them (local governments).
Source: Parliament of Uganda