A councillor representing workers in Kazo District has challenged the government's taxation of allowances paid to district councillors, arguing that a 40 per cent tax rate unfairly burdens local political leaders who already receive limited remuneration. Alex Mugabe Kayabuki said district councillors receive a monthly ex-gratia allowance of Shs250,000, which is subject to the flat tax rate under rules governing secondary employment.
Kayabuki contends the tax treatment is unjust given the legal requirement that public servants must resign from their jobs before contesting for local council positions under Section 129(5) of the Local Governments Act. If the law requires resignation from public service to run for elected office, he argues, the allowances received for serving as elected leaders should not automatically be classified as secondary employment. He also highlighted that councillors at lower local government levels do not face a similar tax burden, raising questions about the consistency of the approach across different levels of local government.
The councillor said district councillors have significant responsibilities including monitoring government programmes, overseeing service delivery and representing their communities, yet the allowance they receive is very small. He noted that additional restrictions on government-related business transactions and conflict-of-interest rules limit councillors' opportunities to supplement their income through other work. He warned that the combination of modest allowances, taxation and economic restrictions could discourage qualified individuals from seeking elective positions at the local government level.
Kayabuki called on the Ministry of Finance, the Uganda Revenue Authority (URA) and Parliament to clarify the legal basis for the differing tax treatments and consider reforms to promote fairness among elected leaders. He urged the government to align the tax treatment of councillors' allowances with the legal requirements governing their eligibility to contest for political office, arguing that this would strengthen decentralisation and improve local governance. He also called for a comprehensive review of the remuneration framework for local political leaders, including consideration of reclassifying their allowances as primary employment income or introducing appropriate tax relief.
"We are not asking for special treatment. We are asking government to establish a fair and consistent system that recognises the responsibilities of district councillors and enables them to perform their duties effectively," Kayabuki said. However, clarification from the Uganda Revenue Authority and the Ministry of Finance is required regarding the tax treatment of councillors' allowances, the application of the 40 per cent rate and the comparison with allowances paid to other public officials and elected leaders.