Public, city representatives to be engaged on property tax

RippleNami Uganda, will conduct a civic engagement in Mbarara City on Monday, 23  May at Acacia Hotel in Mbarara City to discuss the rights of property owners, service delivery and fair and equitable taxation when it comes to the collection and administration of property rates.

Government through the Ministry of Finance contracted RippleNami, an American technology company to develop the Rental Tax Compliance System that enables government integrate data to match real estate properties to their individual or corporate owners.

The system will enable government identify individuals or corporations that have been underpaying their rental income tax obligations.

However, the forthcoming engagement, will be part of the “Services and fair tax for property owners” campaign that seeks to advocate for the rights of property taxpayers to quality public services, while stressing fairness, equity, reciprocity, and accountability from the Local Government in how property rates are managed.

Mbarara City Authority commenced property valuations throughout the city on  of March,9, 2022 targeting properties to be taxed in the next five years, beginning next financial year.

The valuation exercise is estimated to continue until June, 10, 2022.

The comprehensive geographic information system (GIS) enabled property valuation exercise is being carried out by Knight Frank Uganda, with the support of USAID, as part of the Domestic Revenue Mobilisation for Development (DRM4D) project.

According to the deputy city mayor, Priscah Mulongo, Mbarara City’s total budget stands at Shs45 billion whereas  a total of Shs9billion (approximately 20%) comes from local revenue collection realised from property rates, trading licenses and other taxes imposed on the business community within the city boundaries.

“The tax collected caters for infrastructure development like roads, and services like sanitation and garbage collection, antimalarial drugs and clean water, and security, among other services provided through the city council,” she said.

Speaking ahead of the discussion,  Samuel Rwakinanga Tayebwa, a revenue collection expert, said property rates are an important revenue source for the city, yet it continues to exhibit gaps.

Evaluation of property rates is supposed to occur every after five years, but  Mbarara’s was last done in 2015 when it was still a municipality.

The hope is that after the current valuation exercise, tax revenues will increase since many new property developments have taken place since Mbarara attained city status.

Tayebwa noted equitable taxation is the cornerstone of service delivery, which every Ugandan must appreciate if the country is to go forward.

“Every one of us has an obligation to directly contribute to the tax purse. We have very few people contributing yet demands are increasing every day. We all need to work together to widen the tax base which in turn will come with improved services,” he noted, adding that the civic engagement will this time round focus on involving property owners and residents in local service delivery decisions.

Tayebwa said, property taxpayers deserve quality public services and accountability from the city authority in the collection and administration of property rates.

Therefore, there is need to engage local governments, political leaders at sub-national level, the business community and other key stakeholders to put special focus on educating the public about the balance between revenue generation and service delivery.

“We must stress fairness, equity, reciprocity, and accountability to complement the current supply-side (local government authorities) and limitations with demand-side (taxpayer) solutions,” he added.

The Services and Fair Tax for Property Owners campaign seeks to engage property owners in a conversation that will deliver an effective tax sector to boost local services. Local services impact the quality of life and health of all residents.

Local services also impact property values; property values tend to be higher in cities that are well planned and maintained and have access to services, and lower in cities that are lacking these qualities.

Feedback gathered before, during and after the event will be collated into a detailed report to inform the Mbarara City Authority about gaps and opportunities in revenue generation and management of property tax, social fiscal compacts, and advocacy for increased spending based on the feedback from property taxpayers.

The civic engagement, which starts with Mbarara is expected to take place in three other cities, among which include Gulu, Hoima and Fort-Portal.