New Vision (Kampala)

Uganda: KCCA to Levy Tax On All Cars in the City

Kampala Capital City Authority (KCCA) has unveiled a plan to start taxing commercial vehicles which operate in its five divisions. The authority will also tax motorists who use or park on any of the city's streets.

In order for KCCA to implement its plan, New Vision has learnt that the authority drafted a legislative proposal, which is aiming at raising more revenue and decongesting the city.

The Kampala Capital City Road Users and Street Parking Regulation, 2012, is waiting for approval from the Solicitor General's office. The Cabinet has to endorse it before the minister in charge of Kampala presents it in Parliament for consideration.

Among the commercial vehicles which will be taxed, according to a draft legislative proposal, are commuter taxis, trucks, trailers, buses and tippers. Others are bodaboda motorcycles, vans used to market new products, pickups and special hire vehicles.

The fees, which will be levied on these vehicles, range from sh10,000 to sh500,000. For example, a trailer will pay sh480,000, bus or coach sh500,000 and special hire operators will part with sh60,000. Pick-up owners will pay sh50,000 and commuter taxis sh120,000.

It is the same monthly fee commuter taxis are currently paying to the city authority.

A survey carried out by Saturday Vision among various special hire drivers found that the special hire drivers were paying sh200,000 per annum to obtain a receipt, allowing them to operate. However, the drivers say they have been obtaining a receipt in groups of two or three.

"We formed groups to enable us pay the licence fee because we could not afford it individually. I ask KCCA not to implement the proposal because our business is no longer booming. Sometimes, I spend a day without getting people to transport," Andrew Kiwanuka, a driver operating at a stage on Dewinton Road, said.

The survey also indicated that bodaboda cyclists do not remit any fee to KCCA. They only pay for security services and welfare to registered groups they associate with.

"The President exempted us from paying taxes because we earn little from this business," said Robert Lubega, bodaboda cyclist, who operates at a stage near Nakivubo Stadium.

He said he usually earns between sh50,000 and sh70,000 daily."

But a senior KCCA official said the authority has failed to levy a fee on bodaboda cyclists due to lack of a policy to enforce the law. The Maintenance and Order ordinance, which was passed 10 years ago, says it was the mandate of KCC to regulate bodaboda business.

"Under this new regulation, they will be paying sh10,000 per month. We have been carrying a census and soon, we shall publish the statistical figures related to this business," he said.

He also said KCCA would set up gazatted stages for bodaboda business. "Those who will operate outside gazatted stages will be arrested and prosecuted," he said.

Levying commercial vehicles is one of the revenue enhancing measures cited in the authority's financial budget. Other revenue sources include advertisements, local hotel tax, local service tax, markets, land fees, street parking, rent and rates, property rates and migration permit.

A source explained that under this new proposed arrangement, motorists will pay monthly stickers and vehicles without them will be impounded.

"We shall work with traffic officers to impound vehicles illegally operating in the city," he added.

Once the law is passed, owners of commercial vehicles must apply to KCCA's directorate of revenue collection, with a certified copy of the logbook or its equivalent as prescribed by Uganda Revenue Authority. After submitting the application, motorists have to pay a prescribed fee and the KCCA road user sticker will be issued out to them.

The proposed law also states that no KCCA Road User Stickers will be issued to any person who does not provide the required documentation with the application.

A source said motorists who will operate without monthly stickers will face a penalty of 50% of monthly sticker fees for all the periods they have been defaulting.

The move to tax commercial vehicles was endorsed last year by the authority council, headed by the Lord Mayor Erias Lukwago, during the financial budget meetings.

City councilors unanimously agreed that in order for the authority to raise enough revenue, commercial vehicles operating in Kampala city should be taxed. This new development also comes at a time when KCCA is targeting to collect sh75b from local revenue this financial year.

Already, the latest revenue performance report indicates that in the first quarter, the authority managed to collect sh16b against the targeted sh24b.

The report, however, shows a slight improvement in revenue collection in comparison to the same period (2011), between July and November, where the authority collected sh15b. With over 20 revenue sources, the report indicates that the highest revenue is from the taxi business. KCCA collected sh3b from taxis, but its target was sh4b.

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