Locally Raised Revenue affected by COVID 19 – Finance Revenue Enhancement Team

Local Governments local revenue generation has been irreversibly set back by the emergence of the Corona Virus Disease in Uganda, the Ministry of Finance Local revenue enhancement team officials have revealed.

Local Revenue is that amount solicited by different local government units across the country to cater for non-central government funded priorities.

The revenue also supplements conditional and non-conditional grants and donor funding districts get every financial year.

The revenue, among other priorities is used in funding the enhancement and facilitation of allowances to staff, district council seating and all non-funded priorities.

However, since the inception of the COVID 19 lock down by the President on March 21st, several businesses which provides local revenue such as licenses, market and taxi park levies, ground rent, were suspended in urban and peri urban center while fees such as landing fees on water cannot charged.

This jeopardized activities supposed to be implemented by the Local Government frustrating service delivery.

“For instance, districts remain with responsibilities of paying water and power at health centers and schools. We however, as districts receive only UGX 49 million as grants from Central Government to cater for such bills which isn’t enough,” Says John Ekudel, a member of the National Local Revenue enhancement team.

Vincent Kayanja, the Entebbe Municipality Mayor says, the challenges find an already crippled local Revenue generation plan by Entebbe Municipal Council since the biggest local revenue generating activities such as levies of Taxi and Market places which were halted due to the renovation of such places in Entebbe.

For island districts, leaders and revenue collectors dwell on boat landing fees and Fish movement permits for revenue which account for only 20% of the local revenue generation predictions in the financial year 2019/2020.

In Karamoja, Kibaale, Kabaale and some places of Entebbe where tourism contributes to local revenue generation, budgets for local revenue have since been slashed due to the lack of tourists.

Districts benefit from tourism through collecting Hotel tax and generations from tourism sites owned by the districts.

No foreign or local tourist can get to any site since the lock down bars people from moving from one place to another except when there are of essential use to the country.

Other businesses such as airport services which include the generation of aeronautical charges for aircrafts and the generation of Local service tax have all been scrapped leaving meager collections.

Robert Ssenoga, a Local Governance expert in Kampala says, there is need for government to review its policies during this period to ensure that even local Governments function normally.

“Local Governments form the largest part of this country and with a vast population. However, all Government resources remain concentrated in Kampala and a few urban areas living other places unable to function. Government needs to urgently recognize the need fund such areas or allow them to collect revenue so as to develop and efficiently operationalize,” Ssenoga says.

Jennifer Namuyangu, the Local Government Minister says, there is need to adhere to the Presidential directives on COVID 19 and thus prepare to save lives at the moment.

“Local Revenue will be generated later on. lets all first focus on saving lives. It isn’t just the Local Governments that suffer but the country at large.” She says.

Asked if there is need for Local Government to also borrow funds from different financial institutions to fill gaps created by the COVID 19, Namuyangu advised that the different local governments can seek guidance from the Attorney General in such incidences.

Despite being all round, catering for the vast majority of the Ugandan Population, Local Governments suffer with limited resources and poor incentives to work. The institutions cater for about 87% of the Ugandan Population with priorities ranging from agriculture, health, education administration and resource mobilization and, developing capacities of the different people within the country to engage in income generating activities.

However, with such roles the ministry was allocated UGX 2.8 trillion of the UGX 40.2 trillion budget in the financial year 2019/2020, representing a 7% budget allocation. Godfrey Mutabaazi, the former president of the Uganda Local Government Association – ULGA says, government ought to increase funding in the local governments if there it is to improve development in the country side.

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