Uganda Local Government Association (ULGA), the umbrella body of district and sub-county leaders calls for a strong Local Revenue policy to harmonise the challenges district leaders face in local revenue collection, management and utilization.
In a joint statement issued on Friday, the district bosses demanded that the government should support local governments to establish automation of revenue administration systems and to
enhance the capacity local governments in identifying new revenue sources to boost funding for their budgets.
“Local revenues remain very low due to a very thin revenue base as a result of unexplored revenue sources, limited productivity and high poverty levels in the rural areas. The bigger revenue sources are not under the mandate of the local governments but under the jurisdiction of Uganda Revenue Authority which has left [districts] with limited sources of local funds for capital investments,” said Joseph Lomonyang, the ULGA president who is also the Napak district chairman.
He also spoke about the recent reforms introduced by the enactment of the Public Finance Management Act which he said have eroded the discretion of local governments to expand their service delivery priorities.
The situation, Lomonyang said, was worsened with the regression in local economies due to the COVID-19 pandemic.
“This has left local governments with limited sources of local funds for capital investments. Today the Public Finance Management Act reforms have equally eroded the discretion of Local Governments to expend on the local service delivery priorities, which concern has been worsened with the regression in local economies due to decline in trade as a result of the coronavirus pandemic,” Lomonyang said.
He argued that local governments need to revert to collecting and using their revenue at the source instead of remitting it to the centre.
ULGA has also asked the government to expedite the operationalization of newly created administrative units many of which are cash strapped.
Mid this year, government created 10 new cities at a time when it had still failed to facilitate the operationalisation of 348 town councils and 352 sub counties.
Lomonyang said the revenue bases for the old administrative units from which the new ones were curved, cannot be sufficient since they are predominantly subsistence economy based with high poverty levels.