Date Published: July 26, 2017, 6:43 p.m.
ince its institution in 2011, the Kampala Capital City Authority (KCCA) has been leading important reforms in how revenue is collected and managed. Among other elements, the use of Information Communication Technologies has played an important role in facilitating taxes and fees payments and administration. The eCitie programme for example, allows tax payers to declare their due online and offers them a variety of payment options, including Mobile Money. The programme has already yielded interesting results in efficiency and revenue increase.
With 1.9 million inhabitants in 2015 and an average annual growth of population of 4%, the capital city of Uganda faces many challenges: 39% of the population lives under the poverty line, 43% of the Kampalese work in the informal sector, and almost 60% of the Kampala population lives in informal settlements. A National Parliament act in 2010 made obsolete the Kampala City Council (KCC) and instituted the Kampala Capital City Authority (KCCA) instead. The KCCA is led by an Executive Director appointed directly by the President and by a Lord Mayor elected by residents.
As for many African cities, Kampala’s revenue still depends strongly from central government’s transfers (70% of the city’s revenue). As Kampala experiences rapid growth and increased responsibilities, there is a need to strengthen financial autonomy by increasing the share of own source revenue in its total income. Local revenue sources administered by KCCA include a dozen tax and fee revenues, five of which provide for over 80% of the total (property tax, road user fees, trading licenses, local service tax, ground rent) and the others provide a few substantial revenues (taxi operation fees, street parking fees, outdoor advertising, land fees, local hotels tax, market, building fees, vaccines fees, passport fees, marriage certificates, penalties and fines, etc.). When the KCCA initiated its activities in 2011, it encountered important challenges in the revenue collection and administration system. Amongst them: bureaucratic manual system which led to frequent mistakes and high operational costs; absence of a functional city revenue registry which prevented the municipality to track taxpayers and know who had paid or not; delays in collection, reconciliation payments, issuing licenses and receipts; long queues at banks; a system prone to misuse and corruption because of cash collection. In addition, the municipality used more than 151 different bank accounts operating, some without official authorization. All this, led the municipality to have little knowledge on how much money was effectively collected or lost, and to be unable to provide adequate service delivery due to weak revenue mobilization.
Since 2011, KCCA has engaged in a five-year strategic plan intended to steer the authority towards self-sustainability by reforming fiscal structure and modernizing the revenue collection and administration system. One of KCCA main successes has been the automation of revenue administration with the introduction of the eCitie programme. Launched in 2014, eCitie is a unified management information system, that allows for online registration, declaration and payment of local taxes and fees. It offers taxpayers a variety of payment methods options, including payment over the counter, at point of sales, bank payments, mobile payments (mobile money and mobile banking). With the new system, each person or business are provided with a personal identification number, and the information is stocked in a centralized municipal taxpayers’ registry. The online revenue management system also facilitates reporting (both users and managers can consult reports online or via mobile); improves debt collection and refunds, and facilitates enforcement thanks to the use of mobile technologies (SMS reminder of notices and acknowledgement of payments). The project started in the transportation sector (mainly road user fees and taxi operation fees) and is being adapted to other revenue streams such as hotel fees, business licenses and property rates. For fiscal year 2015/2016, total collection by Mobile Money reached approximately UGX 10,9 BN (US$ 3 million) making a fraction of 12.8% of the total non-tax revenue collections as per eCitie.
The financial reforms initiated by the KCCA in 2011 have yield positive results in a very short time frame:
According to Mr. Batungwa Frank Tumusiime, Manager of business processes at the KCCA, the key elements that have ensured the success of the project include: