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Luwero, Uganda | THE INDEPENDENT | Luwero district has rolled out the electronic tax administration system so as to fight leakages and enhance revenue collections.
In the financial year 2021/22, urban councils and the district collected 2.4 out of 4.063 billion shillings target as local revenue. At least 1.7 billion shillings were direct transfers to 18 lower local governments and the district retained only 700 million shillings.
To date, Luwero has been collecting money through manual receipts issued by sub county chiefs and contractors.
Erastus Kibirango, the LC5 chairman of Luwero district says that the district has failed to meet revenue targets due to leakages which include embezzlement, under assessment and issuance of fake receipts among other factors.
Kibirango says that as a result, the district with support from the Ministry of Finance and Uganda Revenue Authority has embarked on rolling out an electronic tax system to fight the leakages.
Kibirango says that under the system, the business will be able to pay taxes through mobile money using district merchant code 243272, registered on both MTN and Airtel lines or directly to the general revenue collection account in the bank.
Godfrey Walakira, the Luwero district senior finance officer says that the district has already deployed its staff with smartphones so as to register all businesses on the system and grade them before each is assigned payment reference numbers to enable them to pay using the e-tax system.
He says the district has also trained its staff and embarked on enrolling lower local governments into the electronic tax system.
Walakira is hopeful that by end of December, all lower local governments will be covered so that payments are made via the system effective January 2023.
Hussein Kato, the district councilor for Bombo town council welcomed the new system saying manual receipting was backward, laborious and a source of corruption.
James Musaazi, a shop owner in Kamira town council welcomed the new payment saying it will save them time to travel to town offices to pay taxes or look for distant banks to deposit it there.
But Chris John Buwembo, the LC3 chairperson of Luwero town council says that the e-tax system will only help to enhance local revenue if the district captures correct data of businesses.
According to the Luwero district budget for 2022/23, a total of Ugx 63.5 billion is expected to be realized in the financial year.
In the financial year 2021/22, Luwero district approved a total budget of 68.9 billion shillings and a supplementary budget of 2.6 billion shillings raising its budget to 71.2 billion shillings.
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