Local Govt Finance Commission seeks law reforms to boost revenue

The Local Government Finance Commission has asked Parliament to amend laws that restrict local governments from collecting revenue, including taxes from boda-boda operators.

Commission chairperson Isaac Musumba said Uganda has more than one million boda-boda riders and that taxing the sector more could boost local government revenue.

Already, operators and owners face direct and indirect taxes, registration fees, and levies across national and local frameworks.

Frank Mawejje, the chairperson of the United Boda Boda Riders Co-operative Union and the interim KCCA boda-boda leadership, said they should have been consulted before proposing additional taxes.

Mawejje said the union has 1.3 million members who already pay taxes he estimates generate around sh6.8 billion daily. He also pointed to fuel taxes, saying riders contribute around sh1,750 per litre in taxes to the government.

He called for a meeting with the government to agree on an affordable tax that riders could pay. He also raised concerns about roadblocks in some districts, where riders face additional challenges.

On Thursday, Musumba said the Local Government Finance Commission is developing a system to ensure that revenue collected by local governments is accounted for in real time.

This was during a meeting by the commission with district chairpersons, mayors, chief administrative officers, town clerks and chief finance officers in Kampala.

Musumba also highlighted the financial burden of road crashes involving motorcycles, which account for an estimated 40% to 62.5% of surgical and trauma budgets at major referral facilities, including Mulago National Referral Hospital.

According to the Ministry of Health, treating injuries can cost between sh700,000 and sh7 million, depending on their severity, while intensive care for critical head injuries can cost between sh2.8 million and sh3 million a day.

Musumba also said that more than half of the sh30.4 billion owed to local governments in property rates is due to Kampala Capital City Authority (KCCA).

"We ask that the capital city becomes the first place where every government entity is up to date with its rates, and that KCCA, whose property rates grew by 17% this year, shares its experience with our new cities."

He urged KCCA to improve revenue collection from markets, noting that it collected sh674 million against a target of sh931 million in the 2025/26 financial year, a performance that fell short of the potential offered by the Integrated Revenue Administration System (IRAS).

Musumba said their system is now connected to all 176 local governments, with at least 3.1 million taxpayers registered by the end of June 2026.

Government agencies owe billions

Speaker of Parliament Jacob Oboth-Oboth was the chief guest at the meeting. He said government entities and agencies owed local governments sh30.4 billion in property rates. Of this amount, KCCA was owed sh15.9 billion, while Jinja City was owed sh4.9 billion.

The Secretary to the Treasury, Ramathan Ggoobi, has directed that the arrears be settled through this financial year's budgets, Oboth added.

Parliament will scrutinise the payments when the Budget Framework Paper for the 2027/28 financial year is presented in December. Parliament's budget committee and sectoral committees will examine whether each government entity has budgeted for its outstanding obligations and reflect their findings in their reports.

"Government cannot ask a market vendor to comply while its own offices are in arrears," said the Speaker.

Meanwhile, Gabriel Budoto, a boda-boda rider in Kampala, said he is not opposed to taxation but urged traffic police to treat riders fairly. He said that motorcycles are sometimes impounded over what he calls minor traffic offences, making it difficult and costly for riders to recover them.

He said some riders flee road crash scenes because their motorcycles are acquired on loans and therefore fear losing their source of income.