Mbarara city launches property tax validation to raise Shs9b from local revenue collection

MBARARA –  Where as Mbarara city’s total budget stands at Shs 45b; a total of Shs 9b approximately 20% comes from local revenue collection realized from trading licenses and other taxes imposed on the business community within the city boundaries.

It is from this background that Mbarara city leadership asked all landlords to comply with the property valuation exercise to achieve their estimated local revenue collection.

The deputy City Mayor, Priscah Mulongo made these remarks while launching the valuation ratings of Mbarara city buildings around the city.

According to Mulongo, the property rates are stipulated in the Local Government Act amended in 2005 Section 3 which requires Local Government to levy property rates on the building owners within its jurisdiction.

Mulongo reports that the last valuation exercise of buildings happened in 2015 at a time when Mbarara was still a municipality.

“Each government entity is supposed to evaluate rates every after five years and ours was last done in 2015 when we were still a municipality but since we were elevated to a city status, we have to re-evaluate the ratings,” the Deputy Mayor said.

“This gives us the mandate to do valuation of properties to come up with new rates because we now have a city status with a new face of Mbarara,” she added.

The Deputy City Mayor says, the rating of Mbarara City buildings will help to track revenue collections from all the developments to change the face of Mbarara.

“We have all witnessed development within a short time regardless of challenges such as Covid-19 but new buildings have been put up and others are undergoing construction which are not captured and do not pay property rates,” says Mulongo.

“For instance, someone who was the building owner for the last five years is no longer the landlord because the property has changed ownership yet we need to account for the property within the city for better planning and budget processes,” she added.

According to Samuel Tayebwa, the City Revenue Officer, the valuation exercise for the buildings in the city is going to be spearheaded by the United States Agency for International Development (USAID) in collaboration with Knight Frank Uganda Ltd, a qualified valuer in Uganda.

“Under Section 8 of the Local Government Act, it is required that a qualified valuer should be appointed for the purpose of rating and it is Knight Frank Uganda Ltd in partnership with USAID that chose to take up the role where we had gaps of an expired valuation,” he said.

Tayebwa adds that the city leadership will be excited to increase property tax from Shs 1.3billion on average every financial year.

“Mbarara raises Shs 1.3billion on average but since it is now a new city, we expect a lot of local revenue because the property rate values vary depending on the market value of the rent which people give,” says Tayebwa.

He noted that contradictory values for the buildings can be challenged to the city authorities or in the valuation court.

“Values which will be published are subjected to objection so I appeal to the landlords to challenge values of property if they are not satisfied with the valuer. But if you don’t view the list and object, that means you agree with the valuation,” the revenue officer explained.

According to Tayebwa, the valuation exercise targeting all immovable property such as kiosks, buildings, industrial, non-industrial or any other structure will end in June 2022.

Aggrey Twijukye, one of the landlords in Mbarara town, invited his fellow landlords to cooperate with valuers.

“I want to appeal to my fellow landlords to make sure they comply because most of our buildings are vacant and unless we declare that this is an empty space, the city council shall levy wrong rates to our structures,” Twijukye said.

On behalf of business people in Mbarara, Twijukye also requested the city council to look into the issue of transparency while collecting taxes.

“Why should kiosks operating from behind the buildings be charged the same amount paid by the business people operating from the main street? Is that fair really?” the city boss asked.

“How does the city expect to increase revenue from Shs 1.3billion to Shs 3 billion when most of the commercial premises are unoccupied due to Covid19 crisis? Otherwise, people are running away from the city which the city leadership has to pay attention,” he added.

The Local Government Act 2005 which stipulates that all buildings in the city councils are levied property rent tax was passed by the 1900 legislature to help collect government revenue for purposes of development.

“Property rates is a levy which is pressed onto the payment of which is placed on the buildings of owners of any jurisdiction that has been confirmed as sufficient to charge property tax and those are town councils, municipalities and cities,” reads part of the Local Government Act 2005.

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