Lord Mayor Erias Lukwago appeared before COSASE yesterday 13th June 2023 to address the matter of Outdoor advertising in the City. He presented a detailed chronology of events on the matter of outdoor advertising in the city, which has since led to a standoff between the authority and the National Outdoor Advertising Contractors Association (NOACA), with court awarding the Agency Shs.8 billion in refund to amounts levied by the Authority without an enabling law.
The Lord Mayor who was accompanied by the Authority Council Speaker Hon. Luyiika Zahara and City Ministers appeared before the Parliamentary committee chaired by Hon.Joel Ssenyonyi and submitted on record that, despite him cautioning the Authority technical team to regularize collections of the said fees by Council enacting Policy and supportive legislation, they over time remained adamant, causing legal claims against the Authority and subsequently entering into consent judgment with NOACA.
In 2020, the High Court in Kampala ordered Kampala Capital City Authority to refund all fees charged from outdoor advertising companies since 2011 after declaring them illegal.
A group of six outdoor advertising companies dragged Kampala Capital City Authority to court demanding a refund of the money collected from them in terms of advertising fees and charges between 2011 and 2019, when they filed the matter.
The companies, including the National Outdoor Advertising Contractors Association Limited, Prime Media Network Limited, AD Concepts Limited, Level 5 Associates Limited, Capital Outdoor Advertising Company Limited, and Adman Source and Contacts Limited, said in 2008 Kampala City Council developed the city’s outdoor advertising policy, which created various advertising rates and fees to be paid as a pre-requisite for carrying out their outdoor advertising business in the city and that they are payable on an annual basis.
They argued that when KCCA was formed in 2011, it went ahead to implement the outdoor advertising rates formulated by Kampala City Council, a move they said was illegal. According to the revised rates in 2018, the registration fee was hiked from Shs 2 million to 5 million, application fee from Shs 10,000 to 50,000, bus ads from Shs 1.5 million to Shs 2.5 million, LCD/LED boards from Shs 1.3 million per signage, and roundabouts from Shs 10 million, among others.
They said that since the increment of the advertisement rates in 2018, KCCA had been defacing and destroying their billboards, signage, and other outdoor advertising tools in the event that payment was delayed. Their lawyers, Ms. Alaka and company advocates, alleged that they had tried to engage KCCA but in vain. The companies accused KCCA of creating serious business uncertainty, yet they were also important revenue contributors in the country.
In his ruling, Justice Musa Ssekaana said KCCA had no power to impose the fees. “It should be noted that no tax can be imposed except under the authority of an Act of Parliament, neither can an authority waive tax except under a law enacted by Parliament. To do so would be null and void and subject to a challenge on the ground that the law does not authorize it,” Justice Ssekaana said.
The judge said that the Constitution under Article 152 is very clear that the said fees are charged under Section 50 of the KCC Act, which gives the respondent authority to levy, charge, collect, and appropriate fees and taxes in accordance with any law enacted by Parliament under Article 152.
He said it is therefore illegal for KCCA to have contradicted what the law stipulates. “The respondent cannot ably rely on the Kampala Capital City Act and Local Government Act to levy the said charges on the applicant, as the taxing Act must be clear and unambiguous. The said law, in the circumstances, does not provide a clear framework under which the applicant and its members are being charged or taxed.”
“The said policy and revised charges were therefore unlawful as they did not conform to the provisions of the law under Article 152 of the Constitution and Section 50 of the Kampala Capital City Act, which regulate the procedure under which the respondent operates.”
The court also ruled that it was illegal for KCCA to deface or remove the billboards, signage, and other advertising tools for the six advertising companies that had not paid the fees.
“I therefore find that the outdoor advertising rates levied, charged, and collected by the respondent from the applicant’s members under the respondent’s City Outdoor Advertising Policy, 2008, and the varied new outdoor advertising rates levied, charged, and collected under Minute KCCA 11/16/2018 are void, ultra vires, illegal, and unlawful,” Justice Ssekaana said.
He ordered KCCA to refund all the monies collected from the eight outdoor advertising companies since 2011 to 2019, when they filed the case, plus 15% interest per annum from the date of filing the matter.
Whereas Mayor Elias Lukwago told the committee that the bill for Ordinance to manage Outdoor advertisement is currently before Council and that the Authority Council Speaker has undertaken to have Council process within two weeks, a lot of questions remain unanswered given that all the above irregularities, including the revising of the outdoor advertising policy in 2018 that saw hikes in fees, happened in his term of office. The Shs 8 billion court award to NOACA is a big loss for the tax payer, and the delay to pass an ordinance to manage the outdoor advertising even after the court ruling showing the council’s actions were illegal shows the Mal-administration at the Lord Mayor’s chambers. Such actions and ill-planned decisions hinder development, bring business uncertainty, and inconvenience revenue collection.
