KCCA should reconsider taxes on business signposts, branded cars

In his maiden address to the media after his declaration as winner of the recent presidential elections, President Museveni linked the perceived protest vote against the ruling NRM candidates in Kampala to the way KCCA executive director Jennifer Musisi handled the eviction of vendors in the city.

This followed the triumph of Mr Museveni’s political nemesis, Dr Kizza Besigye, in Kampala and the loss of all NRM MPs in the city.

The elections saw two NRM MPs in Kampala – Fred Ruhindi (Nakawa Division) and John Simbwa (Makindye East) – lose their seats to FDC’s Michael Kabaziguruka and Ibrahim Kasozi respectively.

Mohammed Nsereko, another NRM MP (Kampala Central) contested as an Independent and won. The Opposition candidates also retained their hold on other constituencies in Kampala.

The anti-NRM tendency was further reinforced in the local council elections, which were overwhelmingly won by the embattled Lord Mayor Erias Lukwago, and a host of other Opposition councillors that saw NRM dominance at the city hall reduced to a paltry three councillors!

To begin with, blaming Musisi shows dishonesty given the President’s public praises of Musisi for her role in ‘transforming the city’. It is also unlikely that the reforms for which he has previously praised her could have been executed without his knowledge and consent. In any case, as a fountain of honour, he had the powers to veto them.

One of the issues that President Museveni has previously praised Musisi for is improved efficiency, convenience and effectiveness in revenue collection, which has seen KCCA’s revenue collections rise, which in my view, is one of the challenges for NRM in Kampala because of the increased tax burden on city dwellers.

In the financial year 2014/15, KCCA’s revenue collections rose to Shs75 billion from Shs28 billion in the last four years compared to the projected Shs94 billion.

Like Charles Dickens’ Oliver Twist, KCCA is yearning for more. Their palm is to raise Shs250 billion by 2018/19 in local revenue collection according to the authority’s Strategic Plan 2014/15-2018/19.

The burden on the tax payer is exacerbated by the fact that KCCA seeks to raise most of that money locally, as stated in its strategic plan: “raising internal resources to finance the strategy is the most realistic and sustainable way of the transformation journey.”

Desirable as the revenue collections are, it is important to note that they mean increased burden on taxpayers, especially business people because of a high tax regime that affects business viability.

This is because KCCA seems to be intent on increasing revenue collections at any cost and in the process hurting the people and potentially driving taxpayers out of business. This is evident in KCCA’s proposed revenue streams, which are inimical to effective business operations.

For instance, last year KCCA removed signposts on several city buildings and tasked business owners to apply to KCCA for assessment to pay an annual tax for them to have signposts erected on their business premises.

This threatens the very existence of the businesses, which pay other direct, and indirect taxes to KCCA. It affects the visibility of the businesses before potential clients and dampens prospects of these businesses getting clients.

Clearly, if KCCA continues to want eggs while disregarding the hen, it will soon kill the goose that lays the golden eggs.