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Kampala, Uganda | THE INDEPENDENT | Robert Nowere, the acting Director Tax Collection under Kampala Capital City Authority-KCCA has defended the 6 percent property tax levy, saying it is fair and legal. The 2005 Local Government Act mandates Urban councils to set property rates not exceeding 12% of the rateable value.
The rateable value of a property is 76 percent of the annual revenue that a building owner collects from tenants. The remaining 24 percent is left for the owner to cater for utility bills and renovation.
However, Nowere, the acting Director Tax Collection in KCCA, says they only tax 50% of the rateable value. He says that 22% of the valuable rate is left to carter for utility bills and between 25 and 30 for any other costs like absence of tenants.
Different Urban Council charge differently.
Entebbe charges 10% of rateable value while Mukono charges 7%. According to Nowere, the city property rates are fare and should be welcomed by property owners.
He says the property tax rates were decided following proper evaluation of city property. The process started with Central division in 2016 followed by Nakawa division in 2018 and Kawempe, Lubaga and Makindye in 2019.
Nowere says the process was conducted by competent and well qualified valuers who worked with Urban Council leaders including division mayors, councilors and local Councils.
This is despite earlier allegations that the valuers didn’t involve local leaders and hence messed up the exercise. Property owners and leaders claimed the valuers assessed their property in their absence and without the guidance of local leaders.
Nowere notes that the exercise in all divisions started with sensitization of property owners. According to Nowere, 87 sensitization sessions were conducted in Kawempe alone prior to the valuation exercise.
There have been complaints that KCCA also valued residential property and levied tax on them. Nowere admitted that the property had been indeed valued but no tax would be levied on them.
Nowere says that property owners could rent out current residential houses and as such, the valuation process would guide the tax levied. He adds that valuation of all property enables KCCA to keep record of the property in Kampala.
KCCA anticipates to collect about 115 Billion Shillings of which Shillings 40 billion would come from property tax.
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