The Minister of Finance, Henry Musasizi, has directed the Uganda Revenue Authority (URA) to stop tax deductions on district councillors’ pay.

The directive was made in response to a matter of national importance raised by the Member of Parliament for Kole North, Opio Samuel Acuti, in Parliament.

In his submission, the MP stated that most district councillors receive a monthly pay of shs250,000. This amount was being subjected to a 30% tax deduction, yet the threshold for Pay As You Earn (PAYE) applies to persons earning shs335,000 and above.

He further stated that councillors at the sub-county level and below also earn below the PAYE threshold but do not have their pay subjected to any tax deduction.

MP Acuti called the deduction irregular and unfair, emphasising that district councillors play a very big role in assisting with oversight functions at the district.

Minister Musasizi indicated that the 30% tax deduction should only apply to persons having more than one source of income. He further indicated that most district councillors only have one source of income, which comes from the district.

The Minister stated that URA had misinterpreted the law and committed to directing URA to stop any further deductions on district councillors’ pay.

Most district councillors have been receiving shs525,000 every quarter after a 30% deduction. With this new directive, they will now earn shs750,000 per quarter—a big relief during this difficult time.

On October 15, 2026, MP Acuti raised a matter of national importance regarding the 30% deduction, citing Kole and other districts in the country where councillors are earning shs250,000 monthly.

This pay is subject to a 30% tax deduction, resulting in a take-home pay of shs175,000 for the district councillors.

The PAYE threshold currently applies to persons earning shs335,000 and above.

Below this pay, such as that of the district councillors, should not be subject to any tax deduction.

Additionally, he cited the sub-county councillors’ pay of shs35,000 per month and the LC1s’ pay of shs10,000, which are below the PAYE threshold and are not subject to any deduction.

He questioned why there was a selective application of the taxation and further queried why district councillors’ meagre monthly salaries of shs250,000 in most districts would be subjected to this deduction, many of whom have no other source of employment.

In his prayers to the Speaker, he asked for the Minister of Finance to clarify the deductions and further called for a waiver of this tax based on the PAYE exemption category.

In his response last month, the Minister of State for Planning and Economic Development, Amos Lugolobi, indicated that they had received similar concerns during countrywide consultations during the budget conference.

He stated that the tax deduction was based on the tax laws and the district councillors’ categorisation of their pay.

Additionally, he indicated that they were consulting further and that if any changes were to be made, they would take effect in the coming financial year through amendment of the applicable taxation laws.

On October 6, Tamali Auma, LC5 councillor in Kole district, wrote a letter to the Commissioner General of URA, demanding to know what deductions are made on their pay.

“I recognize and respect the statutory mandate of the Uganda Revenue Authority to assess, collect and administer taxes in accordance with the laws of Uganda, but I understand that taxation must be imposed and collected strictly in accordance with the applicable laws of Uganda,” parts of her letter reads.

She added: “Article 152(1) of the constitution of the Republic of Uganda provides that; “No tax shall be imposed except under the authority of an Act of Parliament”.

These constitutional requirement, Auma noted, puts an obligation upon all persons and institutions administering taxes to ensure that it’s within the authority granted by parliament.