11 December 2018

Uganda: Municipalities Run to Court Over Government Directive On Taxes

Urban authorities have resolved to petition the Constitutional Court over government's new policy that prohibits them from collecting taxes from public passenger service vehicles.

Under their umbrella body, the Urban Authorities Association of Uganda (UAAU), the leaders say the policy contravenes the law, which permits them to determine and collect taxes for the purpose of providing service delivery.

During their annual general meeting held in Lira Town at the weekend, the members approved their chairperson, Hajj Majid Batambuze, as the lead petitioner.

Mr Batambuze, who is also the Jinja Municipality mayor, said they will compel court to issue an interim order stopping government from continuing to implement the policy.

"The money that is being collected from these buses and taxis is what the municipalities and town councils use to clean the streets, to light up the streets and also to contribute to the councilors allowances. So when government takes away this money, it is disempowering the local governments," he told Daily Monitor after the meeting.

Currently, a taxi is charged Shs80,000 and a bus Shs140, 000 monthly. The revenue is being collected by the association of vehicle owners.

Lira Municipality mayor Mike Ogwang Olwa Veve said: "The policy has made it difficult for the municipality to manage garbage, install street lights and has greatly affected the emoluments of the councillors."

Mr Ogwang said they were seeking a loan worth about Shs60 billion from the United Nations Capital Development Fund to develop Lira Bus Park but the government policy has frustrated their efforts since they had planned to repay the money using local revenue from taxes.

"We are going to leave the garbage uncollected in the bus park for one week and ask the government to send their officials to collect it since we now no longer have the money for garbage management," he added.

The mayor further said that Lira Municipal Council was collecting Shs150 million monthly from the bus park but after the policy was introduced, it reduced to Shs22 million.

A recent circular by the Ministry of Local Government asked vehicle owners to submit the revenue collected from buses and taxis to the Uganda Revenue Authority and not the urban authorities.

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