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KCCA: Don’t Blame High Rent on Tax

KCCA's Acting Deputy Director Public and Corporate Affairs, Peter Kauju

Kampala Capital City Authority (KCCA) has refuted claims by traders that the high rental rates in the commercial buildings are due to high rates on property and rental taxes.

KCCA noted that landlords who use the excuse of taxes to increase rent are just being greedy and unfair “because the rates are detremined by the rent rates.”

Fred Andea the Acting Director revenue collection in KCCA says the noted increase in property taxes is merely a reflection of the amount of rent charged by the various properties in the city in that as the rent value increases, viagra dosage its ratable value increases and consequently  the property tax on such a property also increases.

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“There is therefore no increase in property rates in Kampala city for now. We have been and are continuing to apply 6% on the ratable value of properties. In fact some local governments and urban authorities outside Kampala are already charging more than 6% but KCCA hasn’t increased, erectile ” Andema said

He added ; “the last time KCCA valued properties for rating was in 2005 with a supplementary valuation (for new buildings) in 2011 indicating that KCCA has been charging property rates on the basis of rents that landlords were charging in 2005 and is now charging rates based on the rent the land lords are currently charging.”

This was in response to traders who have continuously blamed government for failing to contain the rent rates in commercial buildings which they say are killing their businesses

Tumuhimbise wilber a trader in the Giate building said rent keeps being increased from time to time and the excuse given by the management is that taxes are so high so they have to increase also to cover the prices.

“We are almost being forced to close the business because of high rent rates. The land lord said they are being affected by property tax and rental tax which makes the total tax paid for a buiding high hence the increased prices, approved ” Tumuhimbise said

Allen Mwine who sells textile in Mukwano center shoping arcade also said the government is equally punishing traders by failing to resolve the high and double tax complaints by the landlords as the burden is normally shifted to them.

‘’Land lords do not want to make losses. Whenever taxes are increased, the burden is shifted to us by increasing the rent and we are not even allowed to question under which circumstances rent is increased,” mwine said.

KCCA also clarified on the issue of rental and property tax, which they said arenot the same and both are provided for under the law.

Peter Kauju, the Acting Deputy Director public and corporate affairs KCCA said; “Rental tax is collected by URA while KCCA collects property tax. These two are provided for under the law. We are only following the law. If the community feels that the two taxes are the same, then they should raise the issue with the law makers because our job is only to implement the law.”

Kauju added that anyone who does not comply with the tax laws will be sued in courts of laws and fined Shs 50 million.

Property tax is provided for under the local government (rating) Act 2005 and amended in 2011. It provides for a charge of property rates between 2% to 12% of the ratable value of a property so as to determine the property tax payable by such a property.

The ratable value referred to above is the annual rental income earned by a property adjusted for conservancy fees (utility costs, minor repairs and maintenance etc).

KCCA in martch 2016 started a property valuation exercise in Kampala City to update the property valuation roll which is essential for property tax administration and to add new properties onto the list

The exercise which started in the central division has registered over 15,018 properties.

Of those, KCCA has received a total of 582 objections from property owners in regards to the assessed property tax while the rest were with respect to details of particulars of the various properties such as wrong address among others.

Property owners with complaints are already visiting the valuation court at city hall which has been sitting to hear complaints for the last week.

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