President Museveni has directed the Local Government Minister Tom Butime to stop the collection of property taxes from rented houses in trading centres around the country.
In a November 28 letter to Butime, Museveni said he has been made aware that some district authorities have started collecting property taxes from rented houses in trading centres, a thing he said is not good and must stop.
“Some are taking 8% or thereabout. I don’t support this because people who pay rent in those areas are not many. If somebody has just put up a rented building, don’t rush in to collect taxes,”Museveni advised.
He urged district authorities to wait until the area is upgraded to a town council or municipality to start collecting property tax from them.
“Property taxes in trading centres and villages put an unnecessary burden on people that are struggling to create wealth. This is not correct.”
Property tax is an annual levy on any commercial property, especially buildings that exists within the jurisdiction of the municipality or city depending on the context.
The tax is charged in fulfilment of the periodic statutory requirement of the Local Government Act 2005 and it caters for infrastructure development, among other services in the area.
The Local Government Act of 2005 allows authorities to charge between 1 to 12 percent of the money made annually by the property but the percentage is set by the elected leaders of the area.