Government will improve service delivery through increased property tax collection

The Ugandan government will use the data to enable better service delivery through increased property tax collections in new towns from Shs6b ($1.7m) to Shs26b ($7.3m) by 2025. Campaign activities organized by Ripplenami Uganda, with support from USAID through the National Revenue Mobilization for Development (DRM4D) program has been planned in Mbarara, Hoima, Fort-Portal and Gulu with the aim of to educate property owners on tax compliance, emphasizing considerations of fairness, equity and responsibility.

The need to support property assessment updating and other activities to strengthen data collection to assist in the digitization of revenue registry databases is highlighted in the DRM4D quarterly report compiled by USAID .

The report notes that this will be essential to facilitate assessment processes that are currently costly and time-consuming, thereby preventing property tax base broadening and compliance.

“The targeted cities have a property tax revenue potential of at least 26 billion shillings by 2025, up from the current 6 billion shillings. Sustained support to land valuation updating is therefore essential for sustainable service delivery,” the report notes, noting that the project which targets at least 10 cities, has so far been rolled out in five cities, including Arua, Hoima, Mbarara. , Mbale and Soroti.

Mr Ramathan Ggoobi, PS finance ministry, told the Daily Monitor over the weekend that the government is supported by a number of measures, including the DRM4D programme, which aim to raise the tax-to-gross domestic product ratio from 0 .5% over the next five years.

“In the medium term, we are looking at a tax-to-GDP ratio of 16%, but our potential is between 18 and 20% of GDP. Our objective is therefore to raise 0.5% per year over the next five years. We want to increase domestic revenue collection by 0.5% of GDP per year,” he said.

Uganda’s tax-to-GDP ratio remains low, stagnating at less than 12% over the years.

Over the years, much of Uganda’s tax revenue has been concentrated in parts of Kampala and the Central Region. However, a number of efforts are underway to expand it to other parts of the country.

Tax compliance has been largely affected by low levels of public trust. Therefore, DRM4D program assets such as the national “Services and Fair Tax for Homeowners” campaign advocate for greater tax compliance with an emphasis on fairness, equity, reciprocity and accountability considerations.

Mr Richard Mugisha, Deputy Town Clerk of Mbarara, said the awareness campaign in Mbarara in May had been instrumental in helping them identify a number of properties that had not paid taxes for a long time.

After the assessment exercise, he said, at least 5 billion shillings will be taken from local revenue.

According to the Uganda Revenue Authority, a number of Ugandans do not contribute to the tax basket; an estimated 2.4 million taxpayers are on URA tax records, but records indicate there are over seven million Ugandans engaged in income-generating activities, with the majority not contributing to the basket tax.

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