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Mbale City Suffers UGX 2B Revenue Shortfall as Financial Year Ends

The council's financial officer Richard Mabala explains that the shortfall in the revenue collections was mainly caused by the outbreak of the COVID-19 pandemic. He says that the city was not able to collect revenue as anticipated at a time when businesses were closed, and the level of activity was suffocated.

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Mbale City Council has suffered a shortfall of more than two billion Shillings in local revenue collections for the financial year 2020/2021. The city collected 900 million out of a projection of 3.5 billion Shillings that was inherited from Mbale municipal council.

The council's financial officer Richard Mabala explains that the shortfall in revenue collections was mainly caused by the outbreak of the COVID-19 pandemic, a disease that has paralysed the world for close to two years. The first year of the pandemic came with a total lockdown of operations for businesses like transport, schools and all congregational places, including markets.

As a result, Mabala says, the city was not able to collect revenue as anticipated at a time when businesses were closed, and the level of activity was at its lowest and adds that the ongoing road construction in Mbale has affected businesses that are supposed to pay taxes, yet still, the roads have not been marked for street parking collections.

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Mabala says that to try to improve the revenues, the City has embraced the Integrated Revenue Administration System-IRAS to avoid payments made to individual collectors, provide a data bank of taxpayers and eliminate contractors who have been defaulting council.    

He says that based on the low collections, the Ministry of Finance has given the City Council a planning figure projection of 472 million Shillings for the coming financial year. However, this is how much they need to spend in the first quarter of the year.

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Kassim Namugali Wamatabu, the Mbale City Mayor observes a need to improve service delivery in the city so that taxpayers see value for money and be encouraged to pay taxes

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In the 2017/2018 financial year, the then Mbale municipality also suffered a shortfall of over 2 billion Shillings in local revenue collection collecting only 2 billion out of the projected  4.8 billion Shillings.