Mbarara City Council has taken action by closing over 29 shops whose owners and landlords have failed to pay their property taxes. This decision comes after a property valuation process conducted in July.
According to Assy Abirebe Tumwesigire, the town clerk of Mbarara City, landlords have not met their obligations in paying property taxes, which contribute approximately 20% of the local revenue collected from trading licenses and other taxes imposed on businesses within the city limits. It should be noted that residential houses where owners reside, registered worship places, local council offices, recreational centers, and embassies are exempted from property tax.
The town clerk revealed that prior to the closure, demand notices were issued and followed up with SMS reminders to the defaulting property owners. The council’s enforcement action is taken after a 30-day warning period.
The deputy city mayor, Priscah Mulongo, disclosed that Mbarara City’s outstanding property tax revenue stands at USh45 billion, with USh9 billion being the amount currently due. This funding plays a crucial role in local infrastructure improvements such as road networks, waste collection, and security, among other services provided by the City Council.
Under the Local Government Rating Act of 2005, commercial property owners are required to pay an annual property tax based on a percentage of their property’s ratable value. The exact rate, ranging from 1% to 12%, is determined by each city council authority. Mbarara City’s current property tax rate is 6%.
