Mbale Industrial Division Loses UGX 2.5B In Uncollected Property Tax

5016 Views Mbale, Eastern Region, Uganda

In short
Industrial Division in Mbale Municipality has lost more than 2.5 billion shillings in uncollected property tax rates. Robert Wambete, the newly appointed division Senior Assistant Town Clerk, identified some of the notable defaulters as Bugisu Cooperative Union – BCU, Bank of Uganda and Centenary Bank among others.

Industrial Division in Mbale Municipality has lost more than 2.5 billion shillings in uncollected property tax rates.  

Robert Wambete, the newly appointed division Senior Assistant Town Clerk, says they unearthed the anomalies in his recent internal audit of the division books of accounts.
 
He attributed the mess to poor local revenue collection policy by the division and laxity on the part of some technocrats of the division. He says he found out that some division technocrats were conniving with the defaulters to fleece the division of the property tax rates.
 
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He said they found out that more than 550 individuals had not paid their property tax rates or colluded with the division revenue collection team in the last four years..
 
Wambete identified some of the notable defaulters as the Division LC III chairperson, Massa Musa, who has defaulted to pay 3. 1 million shillings and Benard Mujasi, the Mbale District LC5 chairman who failed to pay 6 million shillings.
 
Other defaulters are Bank of Uganda that defaulted to pay more than 27 million shillings and Centenary Bank with a debt 4.5 million shillings. Bugisu Cooperative Union – BCU, a farmers union, has reportedly defaulted on property rates taxes worth more than 40 million shillings, while Mbale District Local Administration is expected to pay more than 50 million shillings.  
 
Wambete says they have hired the services of a Kampala-based legal firm – Web Advocates and Solicitors to recover the money from these defaulters.
 
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In an advert published in the Daily Monitor edition of Friday June 28th 2013, the legal firm has given the defaulters up to 14 days to clear their taxes or risk legal proceedings against them. The defaulters have been fined 15% of the amount they have defaulted to cater for legal costs.
  
Property taxes are levied by the local governments and the tax base is the ratable value of the property which takes into account the nature of the property concerned and value of improvements.
 
The tax rates are determined by the local authorities but a maximum of 2% is prescribed by law.
 
The Property Tax Rates Act provides that 75 percent of the money collected is ploughed back to the community in terms of infrastructural development like rehabilitation of roads among others things.
 
The town clerk says because of the anomalies, the division has failed to work on the major roads something he said should be blamed on some technocrats.
The officials and institutions mentioned have not yet commented on the story.

 

About the author

Denis Olaka
Denis Olaka is the URN bureau chief for Lira, in northern Uganda. Apac and Otuke fall under his docket. Olaka has been a URN staff member since 2011.

Olaka started his journalism career in 2000 as a news reporter, anchor, and then editor for Radio Lira in Lira district. He was subsequently an editor with Lira's Radio Wa in 2004 and Gulu district's Mega FM.

He was also a freelance writer for the Daily Monitor and Red Pepper newspapers.

Olaka's journalism focuses on politics, health, agriculture and education. He does a lot of crime reporting too.