Assessing the local government tax collection in Uganda: a case study of Kira municipality, Wakiso district 2015 – 2024

Abstract

This study assessed the local government tax collection practices of Kira Municipal Council, Wakiso District, Uganda, aiming to identify and analyze the pertinent issues, challenges, and potential strategies for improvement. Given that local government tax collection in Uganda largely evolved from colonial mechanisms to enhance revenue for sustainable development, understanding its current efficacy is important. To achieve this, direct engagement with the tax collection officials of Kira Municipal Council provided comprehensive data spanning the fiscal years 2013/2014 through 2023/2024. This allowed for a robust analysis of collection trends and challenges over time. The research commenced with a historical overview of local government taxation and the evolution of decentralization policies in Uganda, establishing a foundational context for the study's specific objectives and research questions. A key focus was to identify the persistent gaps between local government budgetary allocations and actual revenue collections, alongside the specific challenges hindering effective tax collection. The methodology employed a correlation survey approach, engaging one hundred respondents, including Kira Municipal Council tax collection officials. This comprehensive approach facilitated the examination of both historical and contemporary sources of locally collected revenue. Data analysis utilized a blend of descriptive, inferential, quantitative, and qualitative methods to ensure a holistic understanding of the issues. The findings revealed significant impediments to effective local government tax collection in Uganda, particularly within Kira Municipal Council. These include low taxpayer compliance due to public unwillingness, an inadequate business base analysis, and the absence of transparent appropriation of collected tax revenues, which collectively erode taxpayer confidence and willingness to comply. Furthermore, the study identified increasing corruption and inefficiencies in tax collection processes, exacerbating the challenges faced by local government authorities (Mugisha, 2019). In response to these findings, the study proposes several strategic recommendations aimed at enhancing Kira Municipal Council’s tax collection performance. These include mass public awareness campaigns to highlight the tangible benefits of tax compliance, increased central government funding through grants and transfers, and policies to attract both local and foreign investors to Kira Municipal Council. Additionally, improving infrastructure, offering tax relief to new investors, and strict adherence to local government and financial regulations are recommended to foster a more conducive environment for revenue generation and accountability.