Local govts want to tax farmers

By Sylvia Nankya

THE Local government finance commission has advised the Government to introduce taxes on commercial farmers, idle land and on residential houses.

In 2010, local governments only collected sh7b out of the expected sh70b, Johnson Bitarabeho, the commission chairman, said.

He was on Friday presenting the annual report of the local government finance commission to the speaker of Parliament, Edward Kiwanuka Sekandi.


Bitarabeho argued that the current local service tax and the hotel tax were not viable and their performance has remained extremely poor.

He noted that the two taxes introduced in the 2007/2008 National Budget were not properly studied to ascertain their effectiveness prior to implementation.

As a result, they could not effectively bridge the gap arising from the abolition of graduated tax.

Graduated tax collections were above sh80b at the time they were abolished.

“The hotel tax, in particular, was not feasible for rural areas because many of them lack hotels which can contribute revenues. So, we realised this could only benefit a few districts, not the entire country,” Bitarabeho said.

The commission has the constitutional mandate to advise the President on matters relating to the distribution of revenue between the Government and local governments and advise local governments on the suitable tax to be levied.

There are many commercial farmers earning close to sh10m a month, but remain untaxed yet they equally require service delivery from the districts, according to Bitarabeho.

“What is the rationale of taxing teachers, who earn less than sh200,000 a month, yet farmers who earn between sh8m and sh10m enjoy a duty-free regime?” he asked.

“We can collect money targeting the poor,” Bitarabeho added.
He said the tax on residential houses would help local government’s obtain the resources they require to maintain areas where the tax is collected, while the tax on idle land would encourage production and have a multiplier effect when the land is eventually utilised.

“Low collection of local revenues implies that many key programmes of local governments under funded.

These include co- financing of development projects, supervision and monitoring of government programmes and holding council meetings, among others,” he said.

NMS wants own purchase rules

By Sylvia Nankya

THE National Medical Stores (NMS) has demanded separate regulations for the procurement of its medical supplies.

NMS described the current rules under the Public Procurement and Disposal of Assets as hectic and bureaucratic.

Moses Kamabare, the general manager, told the parliamentary finance committee this week that the PPDA law does not provide a favourable regulatory regime for the procurement of medicines and medical supplies.

“Instead, the regulations slow down the process,” Kamabaare said.

“Procurement of medicines and medical supplies should be more flexible in order to ensure that life-saving items are available as and when they are needed by medical practitioners and the patients,” Kamabare told the committee.

The committee was scrutinising the PPDA (Amendment) Bill 2010.

The Bill seeks to strengthen the PPDA and streamline the functions of accounting officers and contracts committees by making them personally liable for their actions in the procurement process. Kamabaare said delays in procurement of medical supplies could result into loss of lives or serious deterioration of health services, because it also impacts on the lifespan of the medicines.

He explained that although some waivers exist in the current PPDA regulations, they do not adequately address the specific attributes of medical supplies as well as recent developments in the procurement, storage and distribution of medicines for government health facilities.

Such developments include a Presidential directive that all medicines and medical supplies for government health facilities be embossed to guard against pilferage to the private health facilities.

“This means that the stock of these items must be specially embossed from industries for NMS and such items will not be available on the open market as ex-stock,” he added.

He said since medicines used in Uganda were registered by the National Drug Authority, no value would be added to the process even if the open bidding method was used in procurement because they are limited to the registered trademarks.

Japan to Fund New Jinja Bridge

By Sylvia Nankya

CONSTRUCTION of the new bridge on River Nile in Jinja will officially start in August 2012, works and transport minister Eng. John Nasasira has said.

The bridge, estimated to cost $135m, will replace the current one at Nalubaale Dam (formerly known as Owen Falls Dam) which has cracked.

Nasasira said the work would be completed within four years.

The Japanese government is providing $102m through the Japan’s Overseas Development Assistance Programme as a soft loan and Uganda will raise the remaining $33m, Nasasira added.
Nasasira was yesterday afternoon meeting the Japanese Ambassador to Uganda, Keiichi Kato.

Kato has just completed his tenure of service in Uganda for over three years.
Nasasira said the project tenders will be called before the end of this year.

“Nalubaale Bridge, completed in the 1954, has exceeded its lifespan. We need an urgent replacement because it is a main gateway for traders in the region,” Nasasira said.

According to the project design, the new bridge will be 525 metres long, with a dual lane and three span cables, making it the largest in the country.

Nasasira said the bridge, once completed, will boost trade between Uganda and its neighbours since it serves as the major trade link through eastern Uganda.

“A country like Uganda can only increase foreign direct investments through improving its general infrastructure,” Kato said.

For the last 25 years, Japan has supported projects in Uganda in road construction, improvement of traffic flow, improvement of trunk roads and resettlement of internally displaced persons.

Judiciary in rent wrangle over premises

By Sylvia Nankya

THE Judiciary is battling with the owners of Bhatia Chambers in Kampala over delayed payment of monthly rental charges for the Constitutional Court premises.

The court has for the last 12 years operated from the building, located on Parliamentary Avenue but risks eviction if the standoff is not resolved.

The court’s tenancy agreement expired on April 30, 2008 and has not been renewed although the department continues to occupy the premises, Dorcas Okalany, the judiciary secretary, told the parliamentary public accounts committee.

She explained that efforts to renegotiate the contract had failed as the landlord does not give the judiciary audience.

“The landlord is difficult and has been holding us at ransom for breach of contract for the last three years. Efforts to renew the contract have proved futile,” Okalany said.

The initial tenancy agreement for the Court of Appeal and the Constitutional Court office premises was signed in May 1999 and renewed on September 18, 2007.

Clause (7) of the agreement provided for a 2% interest per month on delayed payment of the rent and other charges.

Prior to the expiry of the agreement in 2008, delays on rental payment caused a compound interest of over sh987m. Of this, sh586m was paid and another sh42m was paid on simple interest.

The money accumulated in the 2009-2010 financial year because the landlord refused to take payments and instead ordered the Judiciary to vacate the building and sued the Government.

A report by the Auditor General indicates that in the 2008-2009 financial year, the Government spent over sh1b paying rent arrears and interest.

According to Okalany, the tenancy agreement was negotiated by the President’s office, which had the authority to enter rental contracts for government offices.

“However, to save the judiciary from further embarrassment and harassment, alternative premises are being sought,” she said.

Prime Ministers office to stop people resettling in Bududa

Sylvia Nankya

THE Prime Minister’s Office has deployed an emergency team in Bududa to persuade people who have forcefully resettled in the landslide-affected areas to vacate before another calamity befalls them.

The team is comprises about 130 UPDF army personnel under the leadership of Maj. Gen. Julius Oketta, the director of emergency relief co-ordination and evacuation in the Office of the Prime Minister.

This comes on the heel of reports that thousands of families had ignored warnings of a possible disaster and were resettling in Nametsi, one of the areas which were severely devastated by the landslides which covered three villages and claimed hundreds of lives a year ago.

“The majority of people who were affected in last year’s landslide have gone back to where the landslides were but we are persuading them to leave the place before another catastrophe occurs” state minister for Northern Uganda David Wakikona told Sunday Vision.

He said he had met the families and tried to convince them that it was risky to stay in Nametsi during a rainy season but it seemed to be a hard task as many claimed they would rather die while there than move into any camp.

Wakikona said many of the persons resettling in Nametsi had moved from Bulucheke camp, where they had been resettled because they wanted to take advantage of the ongoing rains to begin planting their crops.

Others claim that it’s hard for them to stay far away from their traditional places.

He said “Tradition seems to govern them more than anything else. Some body will tell you I was born here, I grew up here, my parents are buried here, and so I would rather die here.” Wakikona added.

Last year Government moved over 600 families of the Bududa landslide survivors and resettled them at Panyomoli in Kiryandongo district.

Each family was allocated two-and-a-half acres of land and sh250, 000 as start-up cash. But many others rejected the move and opted to return to the risky Nametsi area.

Wakikona said the emergency team is tasked to talk to them and convince them on the need to move to safer places because there is enough evidence that another landslide may be imminent as cracks in one of the hills overlooking Nametsi village are widening.

The hill which is home to at least a thousand people developed a larger fracture caused by continued torrential rains.

He says if the ongoing efforts fail to yield results, Prime Ministers office will forcefully evacuate them.


Published on: Saturday, 2nd April, 2011