KCCA to introduce new taxes

KCCA to introduce new taxes
KCCA Executive Director, Jenifer Semakula Musisi addressing the audience at Imperial Royale Hotel at a previous function. Courtesy Photo.

Kampala Capital Authority (KCCA) physical planning directorate has proposed a range of new taxes and also hiking the existing ones in a bid to tap potential revenue sources.

The new proposed tax schedule was presented to the Kampala city authority council meeting on Thursday in Entebbe and sent to physical planning standing committee chaired by Rubaga North councilor, Abubakar Kawalya for review.

KCCA physical planning director, Moses Atwine explains that “there are many potential revenue sources that have not been tapped into by KCCA because their levy is not legally provided for.”

He says the current development fees and other fees being charged are far below the minimum for the city standards because of inflation that has occurred from the time they were set up in 1990s yet the cost of required city services keeps increasing.

In total, KCCA physical planning directorate is seeking to slap or increase tax on 44 items. Twenty one of these items are new taxes, while 23 are items whose tax is being increased.

For instance, some of the new taxes being introduced is a UGX50,000 fee on request to cut a tree within a private property, UGX2,000,000 express permit for illegal construction, a UGX 500,000 per square metre fee for cutting through road pavement for installation of utility lines, and UGX100,000 excavation and grading permit among others.

Items proposed for tax hike include; parking yards permit from UGX100,000 to UGX500,000 per year, demolition permit from UGX50,000 to UGX500,000, hoarding permit from UGX 100,000 to UGX250,000 among others. The taxes will be implemented immediately if passed Kampala city authority council.

The new tax fees proposals comes amidst budgetary cuts. For instance, KCCA budget for the coming financial year has been pegged at UGX337.39bn from UGX561.33bn during 2016/17 budget representing a UGX224 billion reduction in budgetary allocation.

The reduction is as result of decline in external financing that the authority has been able to solicit from bilateral and multilateral funders.

For instance, KCCA received UGX280.8 billion from external financiers during 2016/17 financier year, largely for Kampala Institutional and Infrastructure Development Project (KIIDP) phase two funded by the World Bank but in the 2017/18 budget, the authority will only receive UGX31.79bn from external financiers.

For financial year 2017/18, UGX118.98 billion has been allocated works and road infrastructure improvement sector. A total of UGX64.9 billion will come from central government, UGX20 billion will be from Uganda Road Fund, UGX31.79 billion will come from external funding and UGX2.2 billion from local generated revenue.