The Local Government Finance Commission is proposing a five thousand Shillings village development levy on all adults in the country.
Johnson Gumisiriza, the Commission’s Principal Financial Analysts, says a study has concluded that the five thousand Shillings annual village development tax would enable extension of services to the lower local levels.
It is suggested that the money should be retained and managed from the local level to provide services like water points among others.
The commission is also suggesting another five thousand Shillings as the lowest fee for workers eligible for Local Service Tax.
Gumusiriza says currently most of the local governments depend on taxes from property rates, market dues and parking fees, which don’t generate enough revenue.
In the 2003/ 2004 financial year almost a quarter of the national budget was allocated to local governments. In the 2017/2018, financial year 9.4% of the national budget was allocated to local governments.
Gumisiriza explains that in the 2014/2015 financial year only 2.3 trillion Shillings went to local governments in form of conditional and unconditional grants.