Magyezi Wants Public Finance Law Amended

Local Government minister Raphael Magyezi has joined district leaders in the push for the amendment of the Public Finance Management Act (PFMA) to devolve more powers to the district administrations as the government seeks to improve service delivery at the grassroots level.

He was speaking at the closure of the third edition of Economic Mkutano, a gathering focused on improving local government financing with a view of achieving the third national development plan (NDP III) and the Sustainable Development Goals (SDGs).

 Magyezi told the gathering that a review of the PFMA needs to be urgently handled, to allow local governments to regain some of the powers that were recentralized with the enactment of the law in 2015.

“The PFMA seems to have recentralized certain powers and mandates which were given under the Constitution. We are going to review this one – the power to approve budgets, the power to approve supplementary budgets etc,” Magyezi said, setting the end of December 2020 as the deadline for technocrats in the Ministry of Local Government to finalise the draft bill for the amendment of the law.

“I’m convinced of certain areas which I have also seen as a step backward in as far as devolution of powers is concerned – the area of financing and resource mobilization… The issue of local government financing is a challenge, the money in the national budget is inadequate, continuing to dwindle; around 12 percent vis-à-vis the mandate of the local governments,” Magyezi said.

Some of the challenges, Magyezi said, are caused by the “politicization” of the local government revenue sources and thus called for legal safeguards to shield the local governments.

“I think we have to embed within the law a shield for local revenue sources from politicization. We are aware that some sources are not tapped, there are some which are lawful and not implemented, and some are being implemented. There are some which are unlawful but being implemented. My focus is on the lawful revenue sources which are not being tapped,” the minister said.

ENFORCEMENT OF LOCAL REVENUE COLLECTION

To improve the districts’ capacity to collect revenue, Magyezi suggested the reinstatement of Local Administration Police to strengthen the local governments’ enforcement arm.

“The issue of lack of enforcement is a big one, we need to agree whether to have or request the government to reinstate the Local Administration Police. It is an issue for discussion; it needs sober dialogue because it has a lot of implications,” Magyezi said.

Until 2007 when reforms in the Police were implemented following the amendment of the Police Act in 2006, local governments managed a Local Administration Police force which was responsible for the enforcement of local bylaws and ordinances. The force was composed of locally recruited officers who know local languages and customs.  

“What happened at that time? We had these people, why were they taken to the central police? We need to look into the strengthening of enforcement of local revenue. I know that in the 5th Schedule of the Local Governments Act, there is some mechanism – the assessment committee, the tribunal, and the possibility of a local government to take you to court… but I would like to avoid those lengthy processes; if you are a hotel and are supposed to pay local service tax but you are not doing it, we need to find a stronger and easier way of enforcing it. I am tasking ULGA and UAAU to look into this, bring your proposals and we take them forward,” Magyezi said.

He also pointed at the need for a law to operationalize the provisions of Article 191 of the Constitution which gives local governments powers to levy and appropriate taxes as well as Article 192 which offers an opportunity to districts to raise money through agency fees. collect money on behalf of the central government and retain a percentage as well as money from royalties.

“As your minister, I want to see that we go ahead and form a legal framework for this currently it is only money from the oil and gas which is given to the local governments, yet there is a lot of money hidden under other sectors but is left to respective ministries to determine what they give to the local governments,” Magyezi said.

He also advised local governments to exploit the opportunity for partnerships with the private sector to finance some development projects in their localities.

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