Bushenyi-Ishaka Municipality local revenue hits Shs 1.2bln after SEATINI intervention
BUSHENYI, June 3, 2026 – Through a targeted intervention by the Southern and Eastern Africa Trade Information and Negotiations Institute [SEATINI] Uganda, Bushenyi-Ishaka Municipality has reversed years of stagnant local revenue collection, increasing its annual locally generated revenue from Shs 680 million to Shs 1.2 billion.
The remarkable fiscal turnaround was revealed during a high-level stakeholders’ accountability dialogue held recently at Tuzza Hotel in Bushenyi district, highlighting a model for sustainable urban development in Uganda.
The three-year initiative, known as the Sustaining Tax and Revenue Improvement for Development [STRID] project, commenced in October 2024 and is scheduled to run until October 2027 with funding from the Embassy of Ireland.
Aloysious Kitengo, Programme Coordinator for Financing for Development at SEATINI Uganda, explained that the intervention is being implemented in ten urban local governments across the country, including five municipalities and five town councils, among them Isingiro Town Council.
“Prior to this, the Embassy of Ireland was primarily focused on funding newly created cities,” Kitengo said. “However, after extensive discussions, it was agreed that we should focus on urban authorities that are progressing towards city status.”
He added that the selected local governments were chosen because strong internal revenue generation is critical to delivering essential public services.
“The core intention is to reduce dependence on concessional financing and donor support by strengthening local revenue enhancement plans so that these administrative units can increasingly finance their own development,” he said.
Kitengo noted that the project also operates at the national level, engaging institutions such as the Ministry of Finance, the Ministry of Local Government, the Local Government Finance Commission, the Ministry of Trade, Industry and Cooperatives, and the Uganda Revenue Authority [URA] to improve fiscal policy and revenue administration.
A key area of focus, he said, has been identifying weaknesses within existing revenue collection systems, particularly the Integrated Revenue Administration System [IRAS].
“We have realised that for local governments to be fully effective, digital and physical systems must work together,” Kitengo explained. “In some cases, the intended benefits of IRAS have been undermined by manual processes. For example, officials designated to conduct field enumeration and registration sometimes carry out manual tax assessments, which defeats the purpose of automation.
“At the same time, challenges such as unreliable internet connectivity and inadequate point-of-sale machines have forced some local governments to revert to manual collections, exposing them to revenue leakages.”
Kitengo also challenged municipal authorities to invest more local revenue in development projects rather than recurrent administrative costs and to eliminate political interference in revenue collection.
“For a long time, a disproportionate share of locally generated revenue has been spent on recurrent expenditure rather than development projects,” he said.
“We are urging leaders to allocate a reasonable portion of these funds to production, education, health and commercial infrastructure. We must also stop the illegal practice of political leaders involving themselves in tax collection. Revenue administration is the responsibility of technical officers, while politicians should focus on policy-making.”
Aggrey Ategyeka, Principal Commercial Officer at Bushenyi-Ishaka Municipality, called on the government to deliberately invest in underserved areas to stimulate economic growth.
“There should be a deliberate effort by government to distribute public investment more equitably,” Ategyeka said. “Bushenyi-Ishaka Municipality is growing faster than Bushenyi District because it has benefited from investments that attract people to consume, trade and do business.”
He noted that infrastructure such as markets, roads and educational institutions creates opportunities that attract investors and stimulate economic activity.
“For an area to develop, people must be attracted to the business centre. Infrastructure development attracts investment. Markets, roads and institutions bring people together and create opportunities for trade. Without such investments, it becomes difficult to attract additional businesses and economic activity,” he said.
However, traders attending the dialogue raised concerns about double and multiple taxation, which they said discourages voluntary compliance.
Amos Isingoma, a trader operating at St Kagwa, said small businesses often face overlapping tax demands from different authorities.
“There is an issue of multiple taxation that causes business owners significant distress,” Isingoma said. “A business may receive demands from local service tax collectors, the Uganda Revenue Authority and municipal property rate collectors at the same time.
“If these entities could harmonise their demands through a single billing system, it would reduce confusion and improve compliance. Small traders with annual stock worth less than Shs 10 million often feel overburdened by trading licences and presumptive taxes.”
Responding to the concerns, Jane Nalunga, Executive Director of SEATINI Uganda, called on government institutions and local authorities to strengthen what she described as a “fiscal social compact” between taxpayers and public officials.
“In any successful revenue mobilisation effort, there must be transparency and accountability,” Nalunga said. “A social compact is essentially an unwritten agreement between taxpayers and duty bearers.
“When taxpayers do not see their money translating into quality health services, better roads or clean water, they naturally become resistant to paying taxes. Government officials must remain respectful when engaging taxpayers and continue accountability dialogues even after the SEATINI project ends.”
Samuel Kumwesiga, Head of Finance at Bushenyi-Ishaka Municipality, confirmed the municipality’s improving financial performance and provided a year-by-year breakdown of revenue growth.
“I want to sincerely thank taxpayers who have complied with our revenue collection efforts,” Kumwesiga said.
“In the 2021/2022 financial year, we collected Shs 680 million. This increased to Shs 870 million in 2022/2023 and reached Shs 1 billion in 2023/2024. Last year, which coincided with SEATINI’s baseline capacity-building activities, our revenue grew further to Shs 1.2 billion.
“Through their support, we have identified previously untapped revenue sources, including sand mining and stone quarrying, which we estimate could generate an additional Shs 100 million to Shs 200 million annually.”
To ensure the expansion is managed fairly, Peter Tukundane, a Policy Analyst at SEATINI Uganda, urged municipal authorities to operationalise statutory bodies such as the Tax Appeals Committee, which remains inactive in Bushenyi despite functioning effectively in neighbouring Isingiro District.
He also encouraged business operators to organise themselves into trade associations to strengthen engagement with local authorities.
Tukundane placed the local revenue drive within Uganda’s broader macroeconomic context, noting that the country’s public debt has risen to approximately Shs 126 trillion.
“As Ugandans, we have a collective responsibility to mobilise domestic resources,” Tukundane said.
“Our national budget stands at Shs 84.4 trillion, yet projected domestic tax revenue is only about Shs 44 trillion. The remaining Shs 40 trillion must be financed through borrowing.
“Unfortunately, some borrowed funds remain idle because projects are approved before feasibility studies are completed or land is secured. As a result, government incurs commitment fees and penalties on money that has not yet become productive.”
Closing the dialogue, Bushenyi-Ishaka Municipality Mayor Richard Byaruhanga warned municipal staff against corruption and the deliberate circumvention of building regulations and licensing requirements.
“We are doing everything possible to widen the tax base so that we can deliver better roads and services, but some officials continue to undermine these efforts,” Byaruhanga said.
“Recently, an officer in this council issued an illegal handwritten authorisation allowing a developer to proceed without an approved building plan. This level of corruption cannot continue.
“Anyone who refuses to comply with transparent systems and lawful procedures will face the full force of the law.”
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