Meeting with Kampala Capital City Authority (KCCA) on Audit Report
Discussed in the Committee on Commissions, Statutory Authorities and State Entreprises on July 18th, 2017
The Committee on Commissions Statutory Authorities and State Enterprises met with the Authority on queries raised by the Auditor General in the 2013/14 report. Hon. Katuntu, chaired the meeting and Authority officials were led by the Executive Director, Ms. Jennifer Musisi.
The audit report noted that in the financial year, the authority had outstanding receivables. In the subsequent years, 2014/15, 2015/ 16 and 2016/2017 the outstanding receivables were UGX 7bn, 63bn and 53bn respectively. KCCA attributed this query to the change in the law on property rates. She faulted government buildings for not paying the tax as a result of a Presidential directive.
For example Institutions like Makerere University and Kyambogo University fall into this category as they receive grants and endowments from the government. The legal Director told the committee that the solicitor general erred in his interpretation of the term ‘grants and endowments’ and the only solution was legal recourse from the High Court. Ms Musisi said while such monies money were treated as a receivables, the MDA’s debts were written off, causing a shortfall. The sentiment in the committee was that the government ought to be the first to comply on tax matter before asking citizens to. The committee, urged KCCA to do whatever was in their power to recover such revenues.
KCCA also added that owner occupied houses also exacerbated the problem because projected revenues then had to fall short. The local Government Act exempts such houses from taxation. KCCA told the committee that they would seek an amendment to the clause in the Act, as it was curtailing the provision of services because of limited revenue collection. Ms. Musisi added that while these owners didn’t pat tax they demanded services which is unfair. The issue had also caught the eye of the World Bank as it raises an issue of equitable taxation and poverty.
Hon Katuntu argued that if in principle all owner occupied houses didn’t pay tax, whether in an upscale neighborhood or poverty stricken neighborhood, then he saw no problem. Hon Byandala rejected the issue saying most Ugandans are low income earners and therefore are protected by the clause. Ms Musisi, however, argued otherwise.
On a brighter note, the Authority told the committee that they were expecting close to UGX 20bn from property rates.
A short fall in the government’s grants was also reported in the financial Year, while the authority expected UGX 118.4bn from government, only UGX 116.8bn was received resulting in a shortfall of 1.8 bn (1.5%). In the subsequent financial years, 2014/15 and 2015/16, there were shortfalls of 19.5 and 21% respectively. KCCA however noted that in the year 2016/17, they had received 100% of their budget. Government shortfall was beyond the capacity of the authority, they argued and said they could only lobby when asked what measures had been taken to sort the query out.
The report made mention of the Authority’s incomplete asset register, with a number of land lacking titles. While the committee received an updated register, they were not satisfied with the progress being made in that regard. Hon Katuntu advised the authority to expedite the process to avoid the land being stolen.
Another contentious issue that arose was the exorbitant court and out of court settlements against KCCA. In the financial year under review, the cases totaled up to UGX 2.4bn. The authority told the committee that a number of these cases were inherited from the then Kampala City Authority, the number mentioned was 133 cases. Many arising from breach of contract, land cases. The authority also added that they bear the costs of cases of the Uganda land board which was adding to the problem. It’s important to note that revenues and losses resulting from decisions of the land board are borne by the Authority. Ms. Musisi told the committee that the costs of the land board dealings outweighed the revenues and implored the committee to look into the matter.
During the review of the query, the issue of eviction of Parkyard vendors arose and KCCA denied its involvement. The authority told the committee that the only dealings they had on the particular matter, was the approval of the development plan. The blame was shifted to the board of trustees of the Nakivubo War Memorial Stadium. Ms. Musisi added that the market was illegal and the occupant’s illegal tenants. The accusation did not sit well with Hon. Kasibante who in turn accused the authority of collecting revenues from an illegal market something the authority said was false. The Rubaga North representative promised to furnish the committee with evidence supporting his claim.
The committee meeting was adjourned at that point, the chairperson urged the witnesses to bring all corresponding evidence to the committee for better consideration.