Case study: Revenue administration reform in Kampala
In Kampala, an Act of Parliament in 2010 replaced the Kampala City Council (KCC) with the current Kampala Capital City Authority (KCCA), with an independent Directorate of Revenue Collection (DRC). The position of the Executive Director (ED), appointed directly by the President, was created as part of the legislation. The appointed ED, Dr Jennifer Musisi, had previously worked as part of the senior management in the Uganda Revenue Authority (URA) and therefore brought with her a solid understanding of tax administration and its necessity for supporting revenue collection efforts in the city.
Like many local authorities, the KCCA faced a number of constraints in undertaking large-scale legislative reform to support its effort in raising more own-source revenue. Therefore, the KCCA decided to start by focusing on the areas that it could influence and that could bring short term results. The DRC analysed the challenges to increasing revenues for the city, and found that there were significant administrative impediments, including:
- Unreliable databases
- Poor technology
- Unclear procedures
- Narrow tax base
- Poor collection procedures
By focusing on tackling these issues through short term administrative reforms, the Kampala Capital City Authority (KCCA) managed to increase its own-source revenue by more than 100% from USh 41 billion to USh 85 billion between 2011/12 and 2014/15 fiscal year 4.
Own-source revenues have continued to grow steadily, resulting in a sustainable improvement in municipal revenue.