The new rates are 4% of taxable value of properties generating five million and below and 6% for properties attracting revenue of five million shillings. Currently, KCCA charges a flat rate of 6% of the taxable value on commercial properties.
Kampala Capital City Authority-KCCA has passed new property tax
The new rates are 4 percent of taxable value of properties generating
five million and below and 6 percent for properties attracting revenue of five million
shillings. Currently, KCCA charges a flat rate of 6 percent of the taxable value on
According to the Local Government Act, local governments can charge a
percentage not exceeding 12% of the taxable value of the property and a minimum
of 2,000 shilling. The taxable value is 74% of the revenue generated by a
The Lord Mayor KCCA, Erias Lukwago says that the changes although still high
for the urban poor make a difference. He says property owners are overstretched
with taxes because they also have to pay rent tax to Uganda Revenue
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Last year, Lukwago proposed a system of taxation where taxpayers are categorized
depending on the amount of revenue generated
from their property
The proposal stated that property owners with a taxable value below five
million should be taxed at 0%. Those with property whose value is between Shs
5m and 20 million shillings pay 3 percent while those above 20 million shillings are
taxed at 5 percent.
The Steering Committee on Revenue Collection was tasked to
study the proposal, conduct consultations and come up with recommendations.
Lukwago who authored the proposal often demanded the committee to deliver on
the assignment given over six months back.
According to the report presented on Tuesday during the council sitting, the committee
Chairperson Doreen Sabuka the councillor Makindye West found that while there was
need to revise the rates, it also noted the significance of all property owners
to contribute through taxes.
The team recommended that a policy for the Urban
destitute be drafted to guide how the urban poor should be handled
but not exempted from paying taxes. The committee further recommended that
properties attracting revenue of five million and below be rated at 5 percent while
those above five million be rated at 6 percent.
According to Sabuka, the proposal was based on the fact that over
100,000 properties fall under the category that attracts five million
shillings and below and they needed to contribute to tax.
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According to the report, the new rates shall cause KCCA a revenue deficit of
six billion shillings.
The acting Executive Director Andrew Kitaka says that government should
increase funding to Kampala to cover for such gaps and boost KCCA budget. He
also adds that they are engaging with development partners to extend more funding
to the Authority.
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The Council has also decided that the Authority be allocated 3% of the total
National Budget to cater for the needs of Kampala considering among other
its status as the Capital of Uganda.
KCCA needs over 800 billion shillings but has been allocated 285.7 billion
shillings for the financial year 2020/2021, 225billion from Government of
Uganda and 30.56 billion shillings from Uganda Road Fund. KCCA expects to
collect 110 billion shillings in non-tax revenue.