President Museveni has ordered the Minister of Local Government Tom Butime to ensure that local authorities stop the collection of property taxes from rented houses in trading centres around the country until further notice.
In a November 28 letter to Minister Butime, Museveni said he had been made aware that some district authorities were collecting property taxes from rented houses in trading centres, an exercise he is not good and must stop.
“Some are taking 8 per cent or thereabout. I don’t support this because people who pay rent in those areas are not many. If somebody has just put up a rented building, don’t rush in to collect taxes,” Museveni said.
The president advised district authorities to wait until the area is upgraded to a town council or municipality to start collecting property tax from them.
“Property taxes in trading centres and villages put an unnecessary burden on people that are struggling to create wealth. This is not correct.”
Property tax is levied annually on any commercial property, especially buildings that exist within the jurisdiction of the municipality or city depending on the context.
The Local Government Act of 2005 allows authorities to charge between 1 to 12 per cent of the money made annually by the property but the percentage is set by the elected leaders of the area.