LEGAL FRAMEWORK AND LOCAL REVENUE GENERATION IN WAKTSO MUNICIPALITY COUNCIL

TABLE OF CONTENTS

Contents

DECLARATION

APPROVAL

DEDICATION iii

ACKNOWLEDGEMENT iv

LIST OF ABBREVIATION AND SYMBOLS xi

TABLE OF CONTENTS V

LIST OF TABLES ix

LIST OF FIGURES x

ABSTRACT xii

CHAPTER ONE 1

INTRODUCTION 1

1.0 Introduction I

1.1 Background to the study 1

1.1.1 Historical Perspective 1

1.1.2 Theoretical perspective 2

1.1.3 Conceptual perspective 4

1.1.4 Contextual perspective 5

1.2 Statement of the Research Problem 7

1.3 Purpose of the Study 7

1.4 Specific Objectives 7

1.5 Research Questions 8

1.6 Research Hypotheses 8

1.9 Operational definition of the key terms 9

CHAPTER TWO 11

LITERATURE REVIEW 11

2.0 Introduction 11

2.1 Theoretical Literature Review 11

2.1.1 LGAs in Uganda .11

2.1.2 Models for Local revenue generation 1 1

2.1.3 Theory guiding revenue collection 13

2.2.1 Conceptual Framework 14

2.2 Conceptual Review 16

2.2.1 Revenue 16

2.2.2 Revenue Generation in Local Governments 16

2.3 Review of related literature 17

2.3.1 The nature of the local revenue sources existing in Local Governments 17

2.3.1.1 Revenue Sources 17

2.3.1.2 Collection of Local Revenues 20

2.3.1.3 Enforcement 21

2.4.1 The trend of local revenues in Local Governments 22

2.5 The factors affecting local revenue collection in Local Governments 24

2.6 The possible ways of improving generation of local revenues by Local Governments 28

Widening the town’s revenue sources base 28

2.7 Comparative Studies 30

CHAPTER THREE 32

RESEARCH METHODOLOGY 32

3.1 Introduction 32

3.2 Area of study 32

3.2 Research Approaches 32

3.3 Research design 33

3.4 Data collection 33

3.4.1 Primary data collection methods/tool 33

3.5 Population 33

3.6 Sample size 34

3.5.1 Sampling techniques 35

3.6 Data analysis techniques 35

3.7 Reliability and Validity of Measurements 35

3.7.1Reliability.35

3.7.2 Validity 36

3.8 Ethical Consideration 36

CHAPTER FOUR 38

PRESENTATION, INTERPRETATION AND DISCUSSION OF FINDINGS 38

4.0 Introduction 38

4.2 Response rate 38

4.3 Demographic characteristics of the respondents 39

4.3.1 Respondent by Sex 39

4.3.2 Age group of the respondent 39

4.3.2 Highest level of education of the respondent 40

4.3.3 Departments 41

4.3.4 Length of service at Wakiso District 42

4.4 Descriptive statistics and qualitative analysis 43

4.4.1 The Nature of the Local Revenue Sources existing in Wakiso District Local Government 44

4.4. 2 Rating the level of effective collection of the sources of revenues in local governments.. 45

4.4.3 Actions done to ensure that above-mentioned sources of revenue are effectively rnanaged47

4.4.4 The category of payers to meet the burden of revenue payment in Wakiso district 48

4.4.5 Estimate volume of revenue paid by revenue payers at Wakiso District 49

4.4.6 The actors used by Wakiso District Local Government in collecting revenue 50

4.4.6 The extent to which actors are effective in revenue collection 5 1

4.5 The trends of local revenues in Wakiso District Local Government in the last 5 years 52

4.6 The sectors mostly affected as a result of low revenue collection 55

4.7 Factors Affecting Local Revenue Collection in Wakiso District Local Government 56

4.7.1 Reasons for changing revenues collected from revenue sources 56

4.7.2 The extent to which factors influence revenue collection at Wakiso District Local Government 58

4.7.3 The extent to which the following factors contribute to the failure of revenue collection.. 59

4.8 The Possible Ways of Improving Generation of Local Revenues by Wakiso Local Government 60

4.9 Conclusion .Error! Bookmark not defined.

CHAPTER FIVE 63

SUMMARY, CONCLUSIONS AND RECOMMENDATIONS OF THE STUDY 63

5.1 Introduction 63

5.2 Summary and conclusions 63

5.2.1 Nature of the local revenue sources Local Government 63

5.2.2 The trends of local revenues in Wakiso District Local Government in the last 4 years 64

5.2.3 The factors affecting local revenue collection in Wakiso District Local Government 64

5.2.4 The possible ways of improving generation of local revenues by Wakiso local government 65

5.3 Recommendations 65

REFERENCES 67

APPENDICIES 72

APPENDIX 1: LETTER OF INTRODUCTION TO THE REPONDENTS 72

APPENDEX II: QUESTIONNAIRE 73

APPENDIX VI 82

PROPOSED BUDGET 82

APPENDIX V 83

TIME FRAME 83

ABSTRACT 

The purpose of this study was to examine the legal framework on local revenue generation in Wakiso District local government. Local revenue collection generates income for the local government organization to finance the social services. Local collection source supports the performance of Wakiso District. The study was guided by the objectives which include: examining the nature of the local revenue sources, analyzing the trends of local revenues in Wakiso District Local Government in the last 4 years, assessing the factors affecting local revenue collection and possible ways of improving generation of local revenues by Wakiso Local Government. The study used a cross sectional study with both quantitative and qualitative approaches. Primary data was collected on 300 respondents using closed ended and open ended questionnaire and interviewed 7 respondents. Results on the major source of local revenues revealed that business licenses, market fees property tax, fish levy, business licenses, fines, penalties, revenue from agricultural and forestry products market fees, bus stand and car parking. The trend of local revenue collection kept fluctuating over the period of time with the tremendous decrease of from 2016 to date which justifies the poor performance at Wakiso district due to inadequate financing of activities. The dominant factors affecting changes in local revenue collection include: incompetent revenue assessors, poor planning on revenue management, lack of enough equipment, failure to carry out feasibility study and failure to not ifr people on time of their dues poor assessment of lax which adversely affect the volumes of revenue collection. However, low affordable tax rate influences compliance to local revenue payments in Local Government. Strategies included: introduction of new revenue sources and benchmarking of successful techniques, improving relations between the district and the tax payers and sensitization of the public to comply on payment of revenue. The study recommend that local government should sensitize the public on relevance ofpaying revenues using local media, community meeting with local leaders and regularly carryout feasibility studies to map the revenue viable sectors to support the efficiency oflocal revenue collection.