Gulu City Council, URA tax collection ‘row’ continues

(Last Updated On: 27 November 2023)

Gulu I Gulu City Council says it is counting losses of shs1.825 billion annually from bus terminals and boda-boda sectors because of a misunderstanding between with Uganda Revenue Authority (URA).

URA has a budget plan to collect over shs27 trillion from taxpayers across Uganda. Gulu City, with an estimated population of 271,049 generates shs 27 billion as taxes annually.

According to the City authorities, the boda-boda business alone generates shs1.125 billion annually and bus companies (terminals) generate shs700 million annually.

The two transport sub-sectors generate annual revenue of shs1.825 billion for the City Council.

Geoffrey Otim is the Division mayor, of Gulu City West. He revealed that they have been battling and not decided on whom to collect revenue from the two transport sub-sectors for over 7 years. Gulu City Council is barely four years old; it was a Municipality before its administrative status changed.

Otim told tndNews that the council is losing billions from the two-sub sectors because of conflict, adding that it’s affecting service delivery.

“The City Council is facing many challenges from URA where they collect double taxes from taxpayers, rentals tax and property tax. It sounds the same. Also, linkage gaps from the Uganda Revenue Authority are affecting taxpayers,” Otim reveals.

“For the last many years, Gulu Municipality charged all (each) resident buses and buses passing via its parks from shs 20,000- 30,000 before leaving. Gulu was generating over shs47 million per month, and shs400 million per year to boost revenue collection and development. For now, the City Council is expected to generate over shs57 million per month.

He further noted that the Laroo-Pece division is 60% bigger in revenue generation than Gulu West division. “If all the two sub-sectors were paying taxes to City Council, they would be in a position to generate shs5 billion bigger than the total approved budget for this financial year at shs 3.7 billion.

“Last financial year (2022-2023), approved revenue was shs3.5 billion but the division managed to generate only shs2.1 billion because of many leakages in the system and other corrupt town agents who misuse revenue.

Otim is urging URA to create a relationship and good collaboration with the local government, and taxpayers in the region through organizing regular engagement with them to bridge gaps and find solutions to problems facing taxpayers.

Yasinto Oyat, deputy Mayor of Gulu West Division in an interview with tndNews talked about the difficulty in collecting taxes from boda-boda associations and bus terminals, criticizing URA for not being clear, urging the Ministry of Finance to come in and clarify who should collect revenue from transport sub-sectors.

Oyat reveals that the division is trying to upgrade to digital technology in its long-term plan to improve revenue collection and monitoring.

In the 2023/24 financial year, Gulu City West division approved shs3.3 billion compared to shs2.5 billion in 2022-2023.

Peter Banya, deputy RCC of Gulu City officiated during a tax awareness campaign at Bomah Hotel where he raised concerns about boda-boda associations in Uganda. He told the meeting that boda bodas are not paying taxes properly, driving the government to borrow loans from other countries.

RCC urged that URA should engage both existing and new taxpayers to know how to register with new technology online and also to improve their website, and address leakage gaps, including those not paying taxes.

“According to Ethics and Integrity Report during the National Anti-Corruption Engagement on zero Tolerance to Corruption at Acholi Inn Hotel Gulu, Uganda loses about shs9 trillion of local government revenue to corruption, shs136billion is lost annually by corrupt Ugandans,” Nicholas Abola, Commissioner Communication, Ethics and Integrity Directorate.

Emmy Ocen, Gulu West Boda-boda association chairperson commented that matters between boda-boda and Gulu City Council are becoming political issues because leaders are divided into two. “Others party says we should not pay tax and others say we have to pay tax to the City Council. We need to withhold and find a standpoint.

Ocean further disclosed that as a boda-boda association, a member pays an automatic tax of shs45,500 to Uganda Revenue Authority for a motorcycle he buys.

He adds that over 25,000 motorcycles pay automatic tax to URA, noting that there are 7,000 registered boda-bodas with over 4,000 not registered in Gulu City.

Stephen Omony is the manager of Lamogi Ber Bus terminal in Gulu City. He said in the previous years, they have been paying a tax of shs110,000 to the Council for resident buses and other buses outside Gulu.

Robert Wamala Lumanyika is the public and corporate affairs manager with URA. He has blamed Gulu City Council.

“By engaging and partnering with the local government, opinions leaders and taxpayers, together we will improve on the strategies and we will bridge challenges and create awareness to local taxpayers in this region,” he added.

URA is mandated to assess, collect and account for Central Government Tax Revenue (includes Non-Tax Revenues) and to provide advise to the government on matters of policy relating to all revenue sources.

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