Kampala, Uganda | THE INDEPENDENT | The Uganda Local Government Association (ULGA) wants the government to put in place a local revenue policy to harmonize challenges faced by local governments in local revenue collection and management.
Speaking at a local government leader’s breakfast meeting organized by Action Aid Uganda on Friday, the ULGA President Joseph Lamonyang said the bigger revenue sources are not under the mandate of the local governments as they fall under the jurisdiction of the Uganda Revenue Authority.
He adds that public finance management reforms have equally eroded the discretion of local governments to expand on the local service delivery priorities which concern has been worsened with the regression in local economies due to the COVID-19 pandemic.
He urged the government to support local governments to establish automation of revenue administration systems to boost revenue collection, management and administration as well as strengthening the capacity of local governments in identifying alternative revenue sources.
He also said local governments should revert to collecting and using their revenue at the source instead of remitting it to central government.
ULGA has also asked the government to expedite the operationalization of newly created administrative units many of which are cash strapped. The new units include cities, town councils and sub counties.
Lamonyang said the revenue bases for the old units cannot be sufficient since they are predominantly subsistence economy based with high poverty levels.
He says local governments are required to transform these new administrative units into units of excellence in production and industrialization and yet the newly created administrative units require big development grants to put in place necessary institutions and social infrastructure for delivering services but with limited or no funding.
Lamonyang laments that the budget allocations to local governments over the years have consistently declined from 19.5% in 2009/2010 to 9% in the financial year 2020/21. He says 74% of these funds are spent on recurrent costs like wages and gratuity leaving a tiny percentage for investments like quality education and health services.