The Democratic Party Uganda – DP has Tuesday given the People’s position on property tax, issuing a 30-day ultimatum to Kampala Lord Mayor Erias Lukwago to scrap the tax.
DP says the new property tax in Kampala is a Lukwago tax because the act enacted by Parliament gives Lukwago and KCCA the discretion to levy or not and to determine the rate from the range of 0 to 12 %.
“We are appalled that Mr Lukwago chose a 6 % rate, well knowing the economic meltdown, unemployment and the burden this imposes of on rent increase and the cost of living in Kampala,” the bloc said in a statement.
This tax will not be paid by the land Lord but will be passed on and paid by the tenants.
DP BLOC’s opposition to the Lukwago tax is based on failure to sensitise the People as required by the same act.
World Bank extended a grant of 20 million US dollar to enable KCCA conduct a thorough sensitisation about the tax before its launched. KCCA did not conduct any sensitization.
DP also cites a shoddy process of the Valuation and assessment.
The said Grant was also to enable KCCA recruit professional personnel to do the a thorough assessment and Valuation.
Valuation is a result of extraction of actual annual rentable incomes. KCCA failed to conduct this process.
The unfair rate of 6% is another reason DP is opposed to the tax. The act gives KCCA power to determine the tax rate between 0 to 12 %.
This tax is eventually passed on to the tenant. The rate of 6% is an over charge considering the many tax obligation of our wanainchi.
DP also cites the levy on owner / occupier properties. The Levy is taxable on rentable income, however the assessment lists do not take this in consideration.
“The DP BLOCK finds the Lukwago tax detestable, anti-people, null and void and should rejected.”
DP thus demanded that Lukwago rescinds his property tax with immediate effect, a fresh exercise to assess, value and determine the fair tax be undertaken after effective sensitization and engagement of all stakeholders and Kampala be zoned and rates levied according to capacity and levels of service delivery.
“Zone A – Central Business district, averagely survived be rated at 2.5%. Zone B – Medium Serviced Zone rated at 1%. Zone C – Low/No Serviced Zones rated at 0%,” said the statement.
It adds: “We are now issuing a 30 day ultimatum within which Mr Lukwago must to act, short of which, we shall invoke the power of the People in Kampala to remedy this tax crisis.”