Hoima City Aims to Boost Tax Revenue through Property Rates

Hoima City Aims to Boost Tax Revenue through Property Rates
PHOTO - Hoima
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Hoima City in Uganda is taking steps to increase its local government revenue by focusing on property rates. This initiative is part of a five-year plan aimed at enhancing revenue collection in local governments.

Hoima City authorities emphasize the importance of compliance to meet their revenue targets through property rates. The city, known for its significance in Ugandan tourism, currently boasts approximately 7,220 commercial properties. They aim to collect at least UGX 1.5 billion from property rates.

This effort follows a valuation exercise completed in February, which identified a total of 17,200 properties within the city, with 7,220 categorized as having a commercial element. Mayor Mr. Brian Kaboyo stated that these commercial properties would play a crucial role in increasing property rate revenues by nearly 750%, significantly surpassing the previous collection of under UGX 200 million.

The comprehensive mapping of properties serves as a database for future reference, ensuring that even residential properties that may convert into commercial properties in the future are included in the property rates register when such changes occur.

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The increase to 7,220 commercial properties is a significant jump from the less than 2,000 properties previously recorded in the city’s property rates register.

Hoima is one of ten cities, including Mbale, Mbarara, Jinja, Arua, Fort Portal, Masaka, Gulu, Soroti, and Lira, where the government is actively working to improve property tax collections over the next five years.

Since 2022, the government, in collaboration with various stakeholders, has been mapping and updating property valuation registers to boost local tax collections as part of the Domestic Revenue Mobilisation for Development strategy. Sensitization efforts have also been conducted, particularly in Hoima City, as part of the ‘Services and Fair Tax for Property Owners’ campaign organized by RippleNami with support from USAID’s Domestic Revenue Mobilisation for Development activity. This campaign aims to strengthen dialogue and engagement between administrations and property owners to reinforce the social fiscal compacts related to service utilization.

Property rates contribute significantly to local government revenue, with at least 85% of the proceeds invested in local government projects such as road and drainage construction and maintenance, street lighting fees, and security enhancement.

It’s worth noting that residential and owner-occupied properties are exempt from property rates. However, the Local Government Finance Commission has previously recommended amending the Property Rating Act to remove exemptions for owner-occupied properties. Such properties make up more than 60% of the properties in urban councils and benefit from services funded by others. The Commission has proposed a flat rate ranging from UGX 100,000 to UGX 200,000 per year.

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