MAKERERE UNIVERSITY

THE IMPACT OF REVENUE COLLECTION ON SERVICE DELIVERY IN LOCAL GOVERNMENTS. CASE STUDY: IGANGA DISTRICT LOCAL GOVERNMENT.

BY

MUKOOLI ROBERT05/U/9187/EXT

FACULTY: COLLEGE OF BUSINESS AND MANAGEMENT SCIENCE

A RESEARCH REPORT SUBMITTED TO MAKERERE UNIVERSITY IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF A DEGREE OF BACHELOR OF COMMERCE MAKERERE UNIVERSITY

JUNE 2011

DECLARATION

I MUKOOLI ROBERT declare that this research is my own work and it has never been submitted for

any academic award in any Institution or University. However where other people’s work was used,

acknowledgement has been fully done.

Signature…………………………………… Date…………………………………………Name: MUKOOLI ROBERTREG No. 05/U/9187/EXT

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DEDICATION

I dedicate this work to my beloved family members:- Mr. Christopher Henry Bageya Kanyope and my

late Mother Tapenensi Ruth Nabirye. Then to all family members:- Grace, Edith, Monic, Alice Allen,

Moses, George, Harriet, Rosette, Abbey, Chrispus, Helen, my daughter Winnie and Isabirye Brian.

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APPROVAL

This research under the title” Impact of Revenue Collection on Service Delivery in Local Governments”

was administered and presented for examination with my approval as a University Supervisor.

Ms. NANYANZI MARION

Signature………………............................ Date………………………………….SUPERVISOR

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ACKNOWLEDGEMENT

I wish to express my sincere appreciation towards all those who greatly contributed to the successful

completion of this research:-

My Supervisor Ms Nanyanzi Marion for her patience, calmness, guidance, and tireless encouragement

towards the writing of this research report.

I wish to thank the Management of Iganga District Local Government for having greatly contributed to

this study by giving me both moral and technical support.

With great pleasure, I thank my Brother Bageya Moses Kanyope of Nile Accountants Auditors and Tax

Consultants and my Sister Doctor Kawala Monic Kanyope who always comforted my drooping spirit by

giving me both moral and financial support in the course of writing this report.

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TABLE OF CONTENTS

DECLARATION………………………………………………………….………………………….……..iDEDICATION………………………………………………………………………….……….………….iiAPPROVAL………………………………………………………………………………….……...…….iiiACKNOWLEDGEMENT…………………………………………………………………..….……….....ivLIST OF TABLES……………………………………………………………………………….….….…..vLIST OF FIGURES…………………………………………………………………………………..…....viLIST OF ACRONYMS………………………………………………………………….……….……….viiABSTRACT…………………………………………………………………………….………………..viii

CHAPTER ONE:INTRODUCTION...……………………………..……..…….……………………….11.1 Background of the study………………………………………………………………..………………11.2 Statement of the Problem………………………………………………………..…………….……......21.3 Research purpose…………………………………………………………………………….…...….....31.4 Research Objectives…………………………………………………………………….……… .….…31.5 Research Questions………………………………………………………………..……...….. …….…31.6 Scope of the study……………………………………………………………….…...……………..…..31.7 Significance of the study………………………………………………………………….…….………41.8 Conceptual/theoretical framework……………………………….…………………………………......6

CHAPTER TWO: LITERATURE REVIEW………….………………………………………….…….92.1 Introduction………………………………………………………………….……………………….…92.2. The Local Government framework paper………………………………………………………..…….92.3. Revenue Collection……………………………………………………………………………….…..122.4. Identification of sources of revenue………………………………….…………….…………….…...132.5 Sensitization of the people…………………………………………………………………….……....14

2.6 Tax Assessment…………………………………………………………………………….…….…...142.7 Revenue Enhancement Plan…………………………………………………………..………….……152.8 Collection of the revenue……………………………………………………......………………….....172.9 Service delivery in Local Governments............................................................................................,....182.10 The purpose of Revenue in Local Service delivery………………………………………..….……..202.11 Strategies for improving Local revenue collection……………………………………………..........212.12 Challenges in Local revenue collection………………………………………………………….......232.13 Budgeted versus actual collections………………………………………………..…………..….….262.14 Reports and records……………………………………………………..…………………...………272.15 The relationship between revenue collection and service delivery………………………………….27

CHAPTER THREE: METHODOLOGY………………………………...……………………………323.1 Introduction……………………………..…………………………………………………………….323.2 Research design………………………….……………………………………………….….………..323.3 Sample procedure………………………..…………………………………………………………....323.4 Population of the study………………………………..………………………………………..……..323.5 Sampling and sampling design………………………………………………………………….….....323.6 Sources of data…………………………………………………………………..…………………….333.7 Data collection methods…………...…………….…………………..…………………….....……..…33 3.8.Data analysis…………………………………………………………………………..………………34

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3.9 Research variables and their measurements…………………………………………….……...……..353.10. Encountered problems and Solutions…………………….…………………………………..….….35

CHAPTER FOUR:PRESENTATIONS, ANALYSIS AND DISCUSSION OF FINDINGS…………………...…..…………………………………………………………….……..…..37

4.1Introduction……………………………………..……………….…………………..………………....374.2 Demographic data………………………………….…………………….…………………..………..374.3 Challenges in revenue collection………………………………………………….…….………….....394.4 How revenue collection can be improved………………………………….………….………...…….404.5 Significance of budgets versus actual collections, reports, and records………………….….………..424.6.The relationship between Local revenue collection and service delivery……………………….....…434.7 Inferential Statistics………………………………………………………..……………………….…43

CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS……………………………………….………………...……………………...455.1Introduction………………………………………………………………………………..…….…......455.2 Summary of the findings………………………………………………...……………………...…..…455.3 Conclusions:…………………………………………………………………………..……………….465.4 Recommendations………………………………………………………………….……………...…..465.5.Suggested areas for future study………………………………………………………..….……….…47APPENDICES……………………………………………….……………………………..……..………49QUESTIONNAIRES……………………………………………………………….……….…………49-54

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LIST OF TABLES

Table 1:The sample size of the respondents………………………………………………...

…………….33

Table 2:Gender of the Respondents……………………………………………….....................…….

…...38

Table 3:Age of

respondents.........................................................................................................................38

Table 4:Showing the education level of the respondents………………….……………….…..

………....38

Table 5: The responses on challenges in revenue collection……………...……………….…...…..…..

…39

Table 6:Responses to Challenges in Revenue Collection….………………………….……….….

……....40

Table 7: How revenue collection can be improved…………..….………...………………………….

…..41

Table 8: Responses to increase in revenue collection…………..…………….………………………...

…42

Table 9: Role of Budgets,Reports and Records…………..………..………………………..……..

……...42

Table 10: Relationship between Local revenue collection and service delivery…………………..…..

….43

Table 11: Correlation between Revenue Collection and Service Delivery……..….………….……..

…...43

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LIST OF FIGURES1.6 Conceptual/theoretical framework…………….………………………………………………………..6

viii

LIST OF ACRONYMS

LC Local Council

DRO District Revenue Officer

PEAP Poverty Alleviation Program

LREP Local Revenue Enhancement Plan

DDP District Development Annual Plan

LGDP Local Government Development Program

MBFP National Budgeting Framework Paper Process

LGDP Local Government Development Program

ULGA Uganda Local Government Association.

MTEF The Medium Term Expenditure Frame Work

NAADS National Agricultural and Advisory Services

UNHCO Uganda National Health Users and Consumers Organization

LGFAR The Local Government Finance and Accounting Regulations

DENIVA Development Network of Indigenous People Voluntary Organization.

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ABSTRACT

This research was aimed at assessing the impact of revenue collection on service delivery in local

governments. The study was based on three main objectives which were:-to examine the challenges faced

by Iganga District Local Government in revenue collection, to examine how revenue collection could be

improved in Iganga district local government and to critically examine the relationship between service

delivery in the district local government.

The researcher obtained a letter of introduction from Makerere University research unit, which was

presented to the officer in charge of Iganga District Local Government where the researcher’s case study

was based. The researcher used both qualitative and quantitative research designs with a sample of 30

respondents who included the staff of Iganga district local government. Qualitative data was obtained

through questionnaires, interviews and observation while quantitative data was obtained through

computation and analysis.

The research findings showed the challenges faced by the district local government such as; political

interference, tax evasion and tax avoidance, how revenue collection could be improved and how revenue

collection had a strong impact on service delivery in local governments. Using Pearson’s correlation of

coefficient it signified that revenue collection had a strong positive correlation with service delivery.

(r=0.943**,p<0.01). The researcher concluded that local governments have challenges in revenue

collection but such challenges were not beyond control. Basing on the findings the researcher concluded

that revenue collection has a great impact on service delivery. This could be evidenced with poor service

delivery with a decline n revenuer collection and improved service delivery with a rise in revenue

collection. However the researchers recommended measures to improve on revue collection like training

tax collectors, sensitizing the masses. The researcher suggested that future studies should be conducted to

analyze any other factors that affect revenue collection as well as service delivery in local governments.

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CHAPTER ONEINTRODUCTION

1.1 Background of the study.

Revenue can is the total amount of money received by any business entity or organization for the goods

sold or services provided during a certain period. For the Government, public revenue means those

amounts it receives from different sources. In other words, the income of the Government is public

revenue. This revenue is from taxes, licenses, and fees. (Andrew Patton).

Iganga District was formerly part of south Busoga province, which had its Headquarters’ at Bugembe.

Iganga was inaugurated in January 1975 and it became Iganga District. Its revenue sources comprised of

market dues, beer permits, trading licenses and other revenues. Officers called market masters collected

the revenue from those sources. In 1998 the Local ` Government Finance and Accounting Regulation

(LGFAR) gave authority to the Local authorities through approved estimates to mobilize and collect

revenue in form of taxes, market dues, fees, trade licenses and all other revenues specified in the fifth

schedule of the Local Government Act part III and IV.

Iganga Local Government Revenue was composed of Local revenue, central Government unconditional

grants, conditional grants, and donor funds. The central Government formulated policies, programmes,

and activities as they apply to Local Governments. The revenue received by Iganga District Local

Government (IDLG) contributed to service delivery such as feeder roads, health centres, schools, and

water and sanitation facilities. This can be observed or measured through the budgeted and actual

expenditures and from the Revenue Enhancement Plan Reports.

According to Revenue Enhancement Plan Report for the financial year 2007/2008 by the District

Revenue Officer (DRO), the revenue for Iganga District Local Government has continued to decline

following the suspension of Graduated Tax in July 2005 for a period of 10 years by the Government.

Graduated Tax was one of the major sources of Local revenue for the District.

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The Government however, committed itself to compensate all Local Government for the loss of revenue

following the suspension. Nevertheless, the compensation grant was inadequate to finance the District

activities.

Iganga District Local Government faced intense challenges in delivering services to the people. This was

because of low revenue collected due to the hostility of the people towards the payment of taxes and the

District having no control over the conditional and donor grants. Furthermore, it was observed that

financial constraints periodically faced by the central Government automatically translated into

unpredictable releases to the Districts. It was in light of the above that the study of the analysis of the

effectiveness of Revenue collection and service delivery became necessary.

It was resolved under Min. 04/LGC/2006 that the District will address the issue to improve on revenue

collection and service delivery. However, the situation was still alarming as the revenue collection from

sources such as trading licenses, market dues, taxes, and fees declined tremendously to ensure effective

service delivery to the community.

1.2 Statement of the Problem

One of the major problems that Iganga District Local Government faces was that of improving on the

revenue collections to be effectively utilised deliver services to the public. According to Revenue

Enhancement Plan Report for the financial year 2008/2009 by the District Revenue Officer (DRO), the

revenue for Iganga District Local Government has continued to decline following the suspension of

Graduated Tax in July 2005 for a period of 10 years by the Government. The central Government

committed itself to compensate all Local Governments for the loss of revenue following this suspension.

However, this funding was inadequate to finance District expenditure on goods and services demanded by

the community.

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Surprisingly the state of revenue collection in Iganga District Local Government lives much to be desired.

Revenue collected from sources such as trading licenses, market dues, fines, and fees was also declining

tremendously to be effectively utilized to provide the required services to the public. This can be

evidenced from the various deficit financial budgets of the District for the past three years, which means

that the estimated expenditures are more than the estimated incomes hence a hindrance to effective

service delivery. It was upon such a state affairs that the researcher investigated the impact of revenue

collection on service delivery in Iganga District Local Government.

1.3 Research purpose The purpose of the study was to establish the relationship between revenue collection and service

delivery in Iganga District Local Government

1.4 Research Objectives.

The objectives of the study were as follows;

i. To examine the challenges Iganga District faced in the collection of revenue.

ii. To examine how service delivery in Iganga District Local Government could be improved.

iii. To establish the relationship between revenue collection and service delivery in Iganga District

Local Government.

1.5 Research Questions.

i. What challenges does Iganga District Local Government face in the collection of revenue?

ii. How can revenue collection in Iganga District Local Government be improved?

iii. What is the relationship between revenue collection and service delivery?

1.6 Scope of the study.

The scope of the study was perceived under three perspectives:- Geographical scope, Subject scope, and

Time scope.

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1.6.1 Geographical scope. The current study was a case study of Iganga District Local Government that

is located in the Southeastern region of Uganda. It is bordered by Bugiri District to the South East,

Namutumba District to the Northeast, Kaliro District to the North-west, and Jinja District to the West and

to the South lies Mayuge District.

Iganga District covers a total area of 1,680 square kilometers with a population of 540,939 people

(Population and Housing census Analytical Report). It is composed of Iganga Municipal council,

Busembatia Town Council, and two counties namely, Bugweri County and Kigulu County. This

geographical scope will be studied because of its proximity to the researcher.

1.6.2 Subject scope

The study analyzed the influence of revenue collection on service delivery in Iganga District Local

Government, which would be representative of other Local Governments in Uganda. This is because

there seemed to be a relationship between revenue collection and service delivery.

1.6.3 Time scope.

It focused on the period 1997 – 2008, as during this period several reforms and studies took place in

respect of Revenue mobilization in Local Governments.

1.7 Significance of the study.

Local Governments. The study will help Local Governments, specifically Iganga District Local

Government to comprehend the effects of revenue collection on service delivery.

Academicians. The study also will be useful to academicians and researchers in revenue collection and

service delivery management as the research will enable to examine the impact of revenue collection on

service delivery in Local Governments.

Researcher. The research will be of great significance to the researcher, as it will enable him to acquire

more skills in research methodology and data analysis.

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Authorities. The research will help the Local Government authorities to carry out accountability and to

be accountable to the various major stakeholders. For example, it will help to check on the

misappropriation of the public funds. The research will be significant, as it will help to improve on the

management policies of the Local council authorities. It will check on bottlenecks and administrative

inefficiency.

It will be an awakening to the authorities, as it will expose some of their inefficiencies such as tax

avoidance. It will urge them to eliminate those inefficiencies so that they effectively manage the Local

council affairs.

Administrators. It will be significant to Local Government administrators as they will be able to

recognize the strong correlation between revenue collection and service delivery in Local Governments.

The study will enable Local Government administrators to use the revenue collected to deliver services to

the community. They will ensure that the generated revenue is effectively used to deliver services to the

community.

Stakeholders. The major stakeholders in the Local Government will benefit from the study. A

stakeholder is an individual, group, institution, or agency that has a common interest, stake, or share in

any particular investments be it service or business. Therefore the major stakeholders such as the

community(beneficiaries),central Government, civil servants, community based organizations or non-

Governmental organizations, donor agencies such as the world bank, United states aids agency (USAID),

international monetary fund. The research will help the major stakeholders to realize the value for money.

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1.8 Conceptual/theoretical framework.

A conceptual framework is a systematic representation between the relationship of variables and

congregative map. The conceptual framework theory describes the effectiveness of revenue collection

and service delivery in Local authorities.

It consists of the independent and dependent variables as well as the control variables. The independent

variable is revenue collection and dependent variable is service delivery, whereas the control variables

consist of the various regulations that significantly influence both the independent and dependent

variables

Independent variables Dependent Variables

Revenue collection Sources of revenue

Sensitization of the people

Assessment/ enumeration

Revenue Enhancement Plan

Service Delivery

Budgeted versus Actual collections

Reports and Records

Figure 1: Source: Adapted from ML JHINGAN: Money, Banking, International trade and public finance

7 th edition. Trends in tax revenue and expenditure of centre and state Government in India (Page 837-

838)

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Identification of Revenue Sources. The revenue collection process begins with identification of the

various sources of revenue such as licenses, permits, fees and others from the community.

Sensitization of the people. The masses are sensitized about the benefits of paying taxes. For example,

they should be enlightened that their contribution in form of taxes leads to effective service delivery.

Assessment /enumeration. There is need for tax assessment. This will enable the taxpayers to know

the amount of revenue they are supposed to contribute. This may involve analyzing the various tax bases

within the Local Government.

Revenue Enhancement Plan. After all this, a revenue enhancement plan is made. This aims at

improving on the efficiency in the collection of revenues from the various sources.

Collection of the revenue. Finally, the Local authorities collect the revenue that contributes to the

delivery of the various services to the people within the Local Government.

Control Variables

Local Government finance and accounting regulations

The constitution of the republic of Uganda.

The Local Government Act 1997.

The Local Government Finance and Accounting Regulation (LGFAR)

In 1998 the Local Government Finance and Accounting Regulation (LGFAR) gave authority to the Local

authorities through approved estimates to mobilize and collect revenue in form of taxes, market dues,

fees, trade licenses and all other revenues specified in the fifth schedule of the Local Government Act part

III and IV. The revenue collected can be utilized to deliver of services to the public.

The constitution of the republic of Uganda. The constitution of the republic of Uganda gives Local

Governments authority to assess, collect, and utilize the revenue to provide the various services to the

people.

The Local Government Act 1997. The Local Government Act 1997, Section 8 (4) provides that Local

Governments’ annual budgets shall reflect all revenues to be collected and received by Local

Governments and to be appropriated for each financial year in order to provide various services to the

community.

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Budgeted versus Actual collections. The budgeted revenue collection is quite different from the actual

collections. In most cases, there is a revenue deficit where by the budgeted revenue collection is less than

the actual revenue collections, which hinders the effective delivery of services to the people.

Reports and Records. Reports on the revenue collected in the District Local Government such as the

Revenue Enhancement Plan Reports generated, at the same time records reflecting the revenue proceeds

generated as this enables the Local Governments to offer effectively the services to the people.

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CHAPTER TWOLITERATURE REVIEW

2.1 Introduction.

This chapter dealt with discussions drawn from the subject matter of revenue collection and its relation to

service delivery in Local Governments. It begins with a review of the existing literature from books

relevant to the study. This followed defining the basic concepts in the study, strengths, and weaknesses of

the literature reviewed and solution to overcome the existing weakness.

2.2. The Local Government framework paper, performance and medium term projections.

This is the first chapter of the Local Government budgetary framework paper by the desk itself. It is best

written in November, when the budget call is being prepared. The chapter can be categorized into two

main sections; review of previous year revenue performance and medium term revenue projections.

2.2.1. Review of previous year’s revenue performance.

The review of revenue performance involves an overview of budgeted against realized revenues broken

down into revenue items (sources) and an analysis of the reasons behind the major deviations between

budgeted and realized amount. The revenue analysis shows the actual annual collections for each type of

generated revenues compared with the estimates to check how accurate the estimates have been.

Furthermore, the revenue analysis show monthly collections for any revenue type to establish definite

pattern or revenue inflow.

However, the major constraints to the collection of different revenues are highlighted, alongside any

successes. When the review is done, a percentage can be determined of how much last years’ Local

revenue sources can be increased to forecast next years’ revenue.

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2.2.2 Sound revenue projections.

The importance of correct forecasting and budgeting of revenues for any Local Government cannot be

overestimated. Realistic expenditure estimates can be framed only if revenue estimates are being based on

realistic expectations. In other words, the announced grant figures from the ministry of finance, planning

and economic development, secured funding from donors and the previous financial years and locally

collected revenues add a reasonable percentage increase.

Nevertheless, most Governments produce optimistic and thus unrealistic revenue budgets, which in turn

create frustration amongst the implementers who have to slow down or put on hold ongoing and planned

activities. This frustration could however be avoided if the principle of producing sound revenue budgets

was taken seriously by the politicians and technocrats which is always difficult to adhere to due to

political interests as well as lack of well trained personnel to formulate sound revenue budgets.

2.2.3 Revenue from Government and donor grants.

Article 193(1) of the constitution and section 84 of the Local Government act 1997; provide that central

Government shall transfer money to Local Governments through unconditional, conditional and

equalization grants. Unconditional grants are the minimum grant paid to Local Governments to run

decentralized services. Conditional grants are monies given to Local Governments to finance programmes

agreed upon between the central Government and Local Governments, and they are spent only for the

purposes for which they are meant and in accordance with the conditions agreed on.

Equalization grant is the money paid to Local Governments as special subsidies, and is paid based on the

degree, which a Local Government is lagging behind the national average standards set by the central

Government. Therefore, through the conditional, unconditional and equalization grants, central

Government can influence Local Government policies and programmes

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As estimates for the sector grants are to be calculated and communicated by ministry of finance, planning

and economic development, Local Governments do not need to invest a lot of time in the calculation of

transfers from the centre. Thus the sector ceilings communicated by ministry of finance, planning and

economic development in the Local Governments' budget framework paper workshops will be

incorporated in the budget framework paper.

The Local Government gets donor funds from agencies such as the World Bank, international monetary

fund, United States aid agency, and friendly countries such as Britain. Such funds are instrumental in

providing various services to the community especially where the Local Government is running a deficit

budget.

Although, It is important to capture the flow of donor funds to Local Governments, but donor funds

should not be budgeted for unless negotiations are in a very advanced stage or, even better, when the

donors have committed themselves to provide the funds. This so because sometimes the donor agencies

fail to honour their pledges, which may drastically hinder the provision of services to the community

especially when the donor funds have been included in the budgets of the Local Governments.

2.2.4. Local revenues.

Local Governments should budget for Local revenue basing it on the previous year’s revenue and a

reasonable percentage increase based on the previous years’ increases. To improve on Local revenue

performance, Local Governments are also required to budget for revenue enhancement activities. That is

to say, their cost and the income from such activities will be applied.

Local Governments are required to budget for Local revenue enhancement activities. Revenue

enhancement activities should be identified and discussed with politicians as to their political

acceptability and amount of yield. Once agreed, the activities should be costed as to show how much such

revenue would cost to collect.

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Unfortunately Local revenue projections should be based on documented capacity to collect taxes and

activities like tax campaigns, training, and mobility of tax collectors which Local Governments always

fail to uphold. For example, Local Governments fail to avoid unrealistic increases from revenue

enhancement activities, which make the realization of revenue and service delivery to be more of a dream

than a reality.

2.3. Revenue Collection.

Revenue refers to the total amount of money received by a company from goods and services sold (Parkin

1995). Local revenue is the income collected by a Local Government from sources within its jurisdiction.

Broadly, Local revenues come from taxes, administrative fees, licenses, and property income. Article

191(2) of the constitution of the Republic of Uganda stipulates the fees and taxes to be levied, charged,

collected and appropriated to include rent, rates, royalties, stamp duties, fees on registration and licensing

and any other fees and taxes that parliament may prescribe.

A tax is the most important source of public revenue. By definition, a tax is a compulsory contribution

imposed on the individuals to meet the expenses, which are incurred for a common cause.

A tax is a non quid pro quo payment because in return there is no direct exchange as it will be with a

price and a fee. The benefit received by the taxpayer from the Government does not necessarily

correspond to the amount of the tax paid. It can be equal, greater, or less than the tax paid. Taxes that a

Local Government collects include trading license fees, property related duties/fees, fishing, licenses,

Local service tax, Hotel tax among others.

Generally, taxation in the context of developing countries is used as a tool to enhance economic growth,

savings, and investment, reduce income inequalities, and finance the setting up and maintenance of social

services, defense, law, and order. Conditional grants consist of money given to Local Government to

finance programs agreed upon between the Government and Local Governments. These are expended

only for purposes for which they were made and in accordance with the conditions agreed on.

Unconditional grants are paid to Local Government to run decentralized services. For example, the

construction of schools, roads, and health centres.

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A fee is a payment made for a service rendered. A fee is a quid pro quo payment as it involves direct

exchange for a good or a service after the payment of money to the Local Government. Fines and

penalties are imposed to punish those who break state laws for example overloading vehicles and these

contribute a relatively small percentage towards the revenue of the District Local Government.

In essence, the revenue collected from the various taxes, fees, conditional grants from the Government

and unconditional grants, donor funds, equalization funds, fees, fines and penalties greatly influence

service delivery in Iganga District Local Government.

However, the aspect of revenue collection is not always precise as depicted in the literature above. The

Local Government rarely derives revenue from fines and penalties from the lawbreakers due to corruption

among the tax authorities. More so even though the literature shows that the tax is the most important

source of Local Government revenue, it is noteworthy that tax revenue can hardly finance a big fraction

of the District Local Government budget to ensure service delivery to the people.

2.4. Identification of sources of revenue.

This involves coming up with various sources on which to levy taxes and fees. The sources could be

peoples’ income generating activities, property among others. The identification of the sources of revenue

is normally determined and undertaken by the management and it is done following various revenue

policies of the Government. In this regard, effective revenue sources are sought and the data collection

instrument is developed.

The enumeration and registration committee identifies and trains interviewers to collect the required data.

The interviewers are also trained how to approach the public, the kind of questions to be asked and how

to deal with non-responses. The more effective a revenue source will be, the more it yields good revenue

returns and hence quality service delivery to the Local Government.

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However, the identification of revenue sources is quite a challenge to the Local Government authorities.

For example, it may be quite difficult to identify various income generating activities, as most of the

economic activities in rural areas are not well documented. Yet the identification of sources of revenue is

done by management, which is sometimes detached, from the grassroots or the common taxpayer. It is

true that the enumeration and registration committee identifies and trains interviewers on how to approach

the public but this in most cases does not yield the anticipated responses hence hindering revenue

collection and effective service delivery.

2.5 Sensitization of the people.

This involves informing and educating potential taxpayers on the purpose and benefits of the revenue

they contribute. Local Governments normally undertake massive sensitization through workshops,

newspapers, and radio stations among others. The sensitizations are spear headed by Local leaders.

Massive and effective sensitization results in sufficient revenue collection hence better service delivery.

Although sensitization of the masses is undertaken, it does not always yield the desired results. For

example some of the tax payers are illiterate and cannot read newspapers, and yet some radio stations are

not listened to by the people given the fact that some potential tax payers are located in remote areas,

some Local leaders lack the skills of sensitizing the public about revenue collection and its impact on

service delivery. Therefore, this will make revenue collection a bit difficult let alone the eventual

provision of the services to the people.

2.6 Tax Assessment.

Assessment is the determination of the amount to be paid in respect of a particular revenue item and

raising a formal notification of the amount to be , the basis for its determination, the due date and mode of

payment among other to the tax payer. An assessment must be based on a clearly defined tax base and

must reflect the rates applicable a tax base. The assessment exercise helps Local Governments to keep a

record of the amount and due date for payment of the respective revenue items assessed, the name,

location and other details of the taxpayer.

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The assessment exercise requires first the identification of suitable assessors and then training them

before embarking on the assessment exercise. A good revenue system must have a team of well-trained

assessors whose main responsibility is to prepare, raise, and distribute assessments in line with the

regulatory and policy framework for Local and central Government. Effective assessment should put into

consideration the following principles.

Ability to pay. This principle has to be exercised in that the taxpayer should be able to pay the tax

assessed on him. The ability to pay is determined by earned income, disposable income, expenditure, and

domestic obligations of the taxpayer.

Simplicity. The type of tax, method of assessment and collection must be simple and understandable by

both the taxpayer and the tax collector. Mugume Christine (2006) asserted that, a good tax should be one

which is easy to understand that to say, the tax payer must be able to know the exact amount to pay and

when and how much to pay without any difficulty.

Complicated taxes tend to lead to disputes, delays, and high collection costs in terms of time and

resources. Organizing assessments basing on the principles ultimately improves on the Local revenue

collection hence service delivery and the reverse is true.

Elasticity. This element should exist in assessment under Local revenue collection to improve on the

tax base and taxes should change directly with change in the tax base and the reverse is true, hence the

revenue is generated.

2.7 Revenue Enhancement Plan.A revenue enhancement plan is a charge against a citizen property or activity for the support of the

Government (American Business dictionary). In a bid to curb and reverse the declining Local revenue,

many Local Governments including Iganga District Local Government came up with revenue

enhancement plans to increase the revenue base to improve on the amount of revenue collected.

15

Local Governments have the right and obligation to formulate, approve, and execute budgets and plans.

Revenue Enhancement Plans should therefore be separately developed in line with and integrated into the

Local Government’s Developments Plan. The Revenue Enhancement Plan ensures a coordinated

approach to revenue generation by the Local council and it is able to measure progress against plan.

Among other revenue sources and strategies for revenue enhancement for Iganga District Local

Government include; rent/hire administration buildings at District and sub county headquarters,

bricklaying, loading and offloading fees, sand pit fees, stone query fees. The Ministry of Local

Government has gone ahead to avail more money to fund the implementation of revenue enhancement

initiatives under the Local Government Development Program (LGDP).

In Iganga District Local Government, a Local revenue enhancement plan (LREP) is normally a three

years plan, which is normally based on the premise of the existing problem for example declining Local

revenue trends.

It identified the various causes of the problem and came up with solutions to reverse the situation. For

example, for the case of declining trend in revenue collection, Local revenue enhancement plan (LREP)

had such broad objectives. These included, assessing the problems, constraints, and challenges of the

current system for each revenue source.

As a result it helps to cultivate close cooperation with the business in the District by raising awareness of

reserve collection and service delivery, improving on the efficiency in the collection of revenue in the

District by coming up with ways of doing that among others. Local Revenue Enhancement Plan aimed at

maximizing revenue collection in the Local Government so that the Local Government captures a firm

position to deliver quality services to its community.

16

A revenue enhancement plan cannot be regarded as a shield against poor revenue collection in Iganga

District Local Government as portrayed in the preceding literature. For example, it is quite difficult for

the District Local Government to separately develop Revenue Enhancement Plan and integrate it into the

Local Government development plan.

Therefore, it is common for the Revenue Enhancement Plan to fail to ensure a coordinated approach to

revenue generation by the Local council. Revenue Enhancement Plans should therefore be separately

developed in line with and integrated into the Local Government’s Developments Plan. The Revenue

Enhancement Plan ensures a coordinated approach to revenue generation by the Local council and it is

able to measure progress against plan.

2.8 Collection of the revenue.

The role of the Local Government in an economy is to provide social services, infrastructure such as

schools, hospital, roads, clean water among others. Then how does the Local Government raise funds to

finance the activities? This is done through collecting taxes, grants, fees, fines, trading licenses and

others. Article 191 of the constitution of the Republic of Uganda allows Local Government to charge and

collect taxes and fees.

The Local Government Act 1997, section eight (4) provides that Local Governments’ annual budgets

shall reflect all revenues to be collected and received by Local Governments and to be appropriated for

each financial year.

Furthermore, Section 79 of the same Act states that Local Government’s revenue shall be regulated as

provided in the fifth schedule. The Minister of Local Government by statutory instruments made the

Local Government Financial and Accounting Regulations (LGFAR) 1998, which prescribes the financial

and accountability measures for compliance by all Local Government. Section 31(1) (a), (d) and 31 (6) of

the Government act empowers the council to supervise and monitor all activities of the Local

Government which among others include monitoring of revenue collection from where the council

members are remunerated.

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The Local Government finance and accounting regulations, 1998. Regulations 25 and 26 empower the

Chief Executive Officer to monitor and ensure that revenue collectors carry out their duties properly and

that all revenue due to Local Governments is properly collected. The Local Government has been directly

involved in collecting Local revenue.

During the time of collection, there has been poor supervision, several shortcomings by collection staff

and poor management in revenue sharing. This leads to declining of revenue because of inefficiencies in

collection and administration

The Government in a bid to raise more revenue decided to adopt the privatization policy. It was found

necessary to privatize Local Government services including revenue collection. The policy was primarily

to develop better and efficient methods of collecting Local revenue generated at the District and the sub

counties. This is mainly done through selling out tenders for outsiders to collect the revenue.

2.9 Service delivery in Local Governments.The Local Government is a crucial institution from where people can best define their priority problems

and organizes to deal with them. Moreover, the poor interact almost exclusively with the Local

Government from which they seek services and support. For example, District Local Government directs

National Agricultural and Advisory Services (NAADS), and support given to farmers.

Local Governments are capable of providing public services, mobilizing community resources,

stimulating private investments, expanding rural-urban linkages, adopting national development to Local

conditions and investing in Local infrastructure (Ssentamu 2004).They can also be a crucial source of

empowerment by offering opportunities for long neglected citizens to participate in the Local decision

making processes. They hence act as a voice for Local needs at higher levels and providing adapted

support for Local people’s initiatives.

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Key sector outputs and allocation are relevant to the District political and administrative officials. The

department work plan summarises the main outputs of each sector within a department (for example

hospitals, primary healthcare, and the director of health services office), and the total budget for the

sector. The output indicators should be limited to three or four per sector. Again the recurrent indicators

should be drawn, where possible from the sector guidelines. In the preparation of recurrent summaries in

some sectors, it may also require to add indicators of service delivery volume as well as well as outputs.

It may not be enough to know the prevailing pupil to teacher ratio (output) for the District indicators of

the volume of service delivery such as the number of pupils enrolled and the teachers on the payroll are

important.

A description indicating how services are being delivered to the community throughout the Local

Government can be formulated. For example there is a section that sets out the summary for the District

as a whole, then a section that splits the sector budget into geographical areas (for example the Local

council, and provides information on the service outputs, such as the pupil to teacher and textbook and

pupils in a given area. Indicators may be on service delivery levels and not traditional activities. For

example in education, information on the enrolment and number of teachers, textbooks and pupils in a

given sub county/division will be provided in place of indicators on the number of activities. This service

being delivered data will provide information on the service delivery outputs, such as the pupil to teacher

and textbook ratios.

The desegregation of data area helps to ensure that funds are allocated fairly throughout the

District/municipality. For example, this involves service delivery investments by section and

geographical area such as counties and sub counties. Members of sector committees, councilors,

departmental managers are interested in service delivery in their areas and therefore ensure that proper

policies are designed and later implemented to ensure effective service delivery to the community.

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A major weakness of the literature review regarding service delivery is that it assumes that the services

are provided by default by the District Local Government from the revenue collected. It portrays a

scenario whereby the public automatically benefits from the programs in the communities and is quite

misleading as it tries to correlate the rural-urban linkages, and shows how the citizens directly participate

in decision making which is not always the case.

2.10 The purpose of Revenue in Local Service delivery.

Being a major source of revenue to Local Governments, taxes are used to finance the recurrent and

development expenditures. Local revenue contributes to service delivery with such services as feeder

roads, health centres, and donations to schools, among others. This is done through Local Government

development programs (LGDP).Local revenue is not subject to central Government control and it

encourages ownership of Local investments by taxpayers thereby linking their taxes directly to usage.

Local revenue allows maintenance and servicing Local Governments’ sustainable investments and it

finances remuneration of all elected leaders in Local council systems. Such services offered by Local

Governments are effectively undertaken with sufficient and efficient revenue collections. A decline in

revenue collection will mean less or poor services offered by Local Governments to the Local

community. This is because Local revenue contributes a reasonable percentage in funding service

delivery.

The major purpose of revenue collection is always sacrificed at the expense of individual selfish interests

of the Local authorities. It is true that the revenue collected is meant to finance the recurrent and

development expenditures in order to provide services such as feeder roads, health centres but this is not

always implemented. Even thought the literature above shows that the amount of revenue collected

greatly correlates with the services delivered to the public, it is not always the case as some revenue is

always misappropriated.

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2.11 Strategies for improving Local revenue collection.

A classical economist Adam Smith (1776) put forward the canons or general principles of taxation which

he said should be observed when imposing a tax, and these are; equity, certainty, convenience,

productivity, buoyancy and economy. These canons if followed in tax assessment, collection and

administration, improve on the Local revenue collection and administration.

Convenience. Under the principle of convenience, Adam Smith stated that every tax ought to be levied

at the time that it is most likely to be convenient for the taxpayer to pay. He further said that, both the

time and mode of payment should be convenient. For instance, farmers should be taxed when they sell

their crops, office workers to be taxed when they receive their salaries, traders taxed when they make

profits.

Canon of Equity. Under the equity principle, Adam Smith Stated that the amount of tax burden on

taxpayers should be equal or proportional to their incomes such that the higher the income earners pay

more taxes (tax liability) than the low-income earners. Adam smith’s principle of equity is based on

humanitarian grounds. Equity takes two forms, horizontal equity, and vertical equity. Horizontal equity

means that people in the same income bracket should be taxed equally while vertical equity means that

people in different income brackets should be taxed differently.

Productivity. Tax productivity is the ability of a given tax to generate as more revenue as possible to

the Local Government. Therefore, a tax should be more effective and productive as possible. The tax

system should yield enough revenue to the treasury, so that the Local council does not resort to deficit

financing.

Certainty. The canon of certainty has to be put into consideration in order to improve on the Local

revenue. The taxpayer must be protected from unnecessary harassment by revenue officials by advocating

for the certainty and non-arbitrariness of the taxes, fees, and charges that each individual is bound to pay.

This is because unpredictable taxes discourage investment and reduce effort of work.

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Economy. Local revenue collection can also be improved by the principle of economy. The principle

stresses that the cost of collecting and administering taxes, fees and charges must be much lower than the

tax proceeds. The collection costs should not exceed 5% of the tax. It is meaningless to impose taxes,

which are widespread and difficult to administer as they impose an unnecessary burden upon the society

in the form of additional administrative expenses.

Flexibility/ Buoyancy. The tax should change directly with the change in tax base. A tax should be able

to change directly with the changes in the economic situations or incomes or tax bases with the Local

administration, for instance if the taxpayers’ incomes rise, even the taxes on them should be able to adjust

directly and taxes should reduce as incomes reduce. The fees/tax structure should be adjustable to the

changing requirements of the Local Governments with ease; and the Local revenue system should not be

complicated.

Diversity. It is risky for the Local Government to depend upon very few sources of Local revenue such

as a system is bound to breed a lot of uncertainty for the treasury. If Local revenues come from

diversified sources, then any reduction in a particular revenue item is bound to be very small, hence the

principle of diversity. However too much multiplicity of taxes should be avoided as it may lead to

unnecessary cost of collection and hence violate the economy principle.

Fiscal authorities should be in position to predict and accurately forecast the revenue a particular tax will

generate and at what rate it will flow in, for this is because inelastic tax is usually unproductive.

However, the various canons of taxation as put forward by Adam smith such as equity, convenience,

flexibility, certainty, may not fully help in tax assessment, collection, and administration because of the

nature or make up of the Local Governments. For example, it is difficult to estimate the convenient period

of paying taxes by some people who are in informal sectors. With equity, it might be quite difficult to

determine people who are in the same income brackets because of the tendency of the tax people to be

very secretive when it comes to disclosing their wealth.

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Indeed Adam smith’s principle of diversity may not be appropriate in less developed economies where by

the tax base is low with agriculture as the main economic activity. It can be asserted that Adam smith’s

principles of taxable can be more appropriate in developed countries with a variety of tax bases and with

a well-developed database about individuals and their incomes

2.12 Challenges in Local revenue collection.

A number of challenges face Local revenue collection in Local Governments and these include the

following:-

There are inadequate capacity and technical skills to manage Local revenue collection in Local

Governments. The problem is compounded by the fact that many workers within the Local Government

lack the necessary academic qualifications. There are inadequate capacity and technical skills to manage

Local revenue collection in Local Governments. The problem is compounded by the fact that many

workers within the Local Government lack the necessary academic qualifications. For example, a greater

percentage of the labor force engaged in revenue collection cannot differentiate between direct and

indirect taxes let alone knowing the implications of these various types of taxes.

The tendering function has attracted many criticisms on their lack of transparency, compromising the

amount of revenue collection and there is lack of professionalism, which manifests itself in corruption

tendencies in the award of tenders. To make it worse, the line that separates the tender board from the

political structures in the District is a thin thread, hence leading to a vicious circle of corruption and

inefficiency.

Political interferences. A survey carried out by the Uganda Local Government association (ULGA)

released, indicated that politicians are “continuously and unlawfully awarding themselves tenders”. The

Local Government ministry and the development network of indigenous people organization (DEVIVA)

also support the study. It alleged that politicians pressure and influence the procurement committees to

award tenders. The association noted that this led to shoddy work and substandard services because the

companies are hard to supervise.

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The Uganda national health users and consumers’ organization (UNHCO), that conducted the study

pointed out that the procurement process was the most abused by politicians and it remained obscure for

them on how to win tenders. Robinah Kaitirimba, the UNHCO national coordinator, said that the four-

month survey conducted in Nebbi, Masaka, Nakapiripirit and Kasese focused on health care, education,

water and opportunities for Local economic development.

Abel Ojeo, a consultant for UNHCO, said that most politicians would not admit that they were awarding

themselves tenders. He stressed that finding on the ground indicate that politicians had crippled service

delivery as civil servants fear to supervise their companies for fear of victimization. “The politicians

have taken over the purchase of NAADS inputs and they end up procuring low quality materials to make

a big difference,” Ojeo added.

The vice president of ULGA Richard Andama said Local Governments receive 30% of the national

budget, which is small compared to the work they are expected to deliver. Andama who is also the L.C. 5

Chairperson of Arua District said that the survey would help them to know the Local Government gaps.

(Adapted from the New Vision. The New Vision, Monday July 5 2010. Report pins politicians over

tender boards)

It should be noted that even at the Local Government, level there is a lot of interference by the political

leaders, which hinders the desired objective of increasing revenue collection in local governments. For

example, many tax evaders/defaulters have always been shielded by the political ‘heavy weights’ within

the District Local Government.

Inappropriate laws governing property rates and trading licenses. Some of the laws governing

property rates and trading licenses are not appropriate in Local Governments. Some of these laws will be

appropriate in big commercial centres where the tax base regarding property and trading licenses is high

unlike the rural based Local Governments, hence low revenue collection.

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Inadequate record keeping by the authorities. This greatly affects accountability as far as revenue

collection, is concerned. Although some records are essential in tax administration in Local Governments,

they do not always achieve the desired goal because they are always abused/ misused by the revenue

authorities.

The weak tax-benefit linkages. This has greatly led to poor revenue collection as the masses fail to

realize the purpose of paying tax yet they do not directly benefit from the fruits of taxation. In some

instances, the poor tax-benefit linkage has resulted into violent strikes especially towards the tax

administrators who are regarded as daytime robbers.

A challenge of tax assessment collection and administration. It is worth noting that the tax

assessment collection and administration is a very big challenge. For example, the apportioning of the tax

burden to the potential taxpayers is unfair. In most cases, the process of tax assessment lacks both

horizontal equity as well as vertical equity. Unfair taxes are imposed on the people and this is partly due

to the undefined sources of income as well ignorance about the true nature of a tax system by the tax

authorities hence leading to poor revenue collections.

Poverty among the taxpayers. Most of the potential taxpayers in Iganga District Local Government

are poor, as some live below the poverty line. This means that the tax authorities are left with a small

number of individuals who taxable and who have the tax capacity. Tax capacity is the ability of a

taxpayer to pay a tax assessed on him and remain with enough disposable income. Hence, the low taxable

capacity affects revenue collection and hinders effective service delivery.

Poor motivation to tax authorities. The tax collectors are not well motivated in terms of material and

financial incentives and yet lack the moral support from the top District authorities. For example, they

collect a lot of revenue in comparison to what they earn as salaries or wages yet the exercise involves

high risks like violence in form of tax riots, harassments, as well as assault from the potential taxpayers.

The poor motivation has caused complacency, neglect, and more so bribery and corruption among the tax

collectors.

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2.13 Budgeted versus actual collections.

Budgeted revenue collections refers to the Local Governments estimated amount of revenue to be

collected in a financial year and the costs to be involved in collecting that revenue. In addition, the actual

revenue collections are what the Local Government s actually collects by the end of a given financial

year. In some instances, the actual collections could be greater than the budgeted and this shows good

performance in revenue collection.

In other instances, the actual collections could be less than the budgeted. This shows negative

performance in revenue collection and it is not desirable if the Local Government is to deliver quality and

sufficient services to its people.

The Local Government must produce a budget because; the Local Government has scarce resources,

which are not sufficient to carry out all its programmes and projects. It is a legal requirement, in order to

identify and disclose the sources of revenue, in order to requisition for funds to implement approved

programmes and projects, in order to give an overview of past financial and output performance. In order

to control the implementation of various programmes so that a particular programmes do not encroach on

the resources of others.

It is a requisition of good governance and a political tool that provides overall guidance, it is an

information/communication tool for both the central Government and donors detailing how transfers from

them to Local Governments be utilized, and whether compliance with donor and national objectives is

being met.

It is noteworthy that not all deficit budgets are indicators of poor performance as the literature above

purports to assert. This is because some deficit budgets are an inducement to economic growth and

economic development. The authorities may use deficit budgets to solicit big funds from donors and

hence foster development in Local Governments for example by encouraging investors and at the same

time some deficit budgets aim at relieving the taxpayers of the burden of taxation. Yet even though the

Local Governments produce budgets as a must due to various significances of the budgets, sometimes

these budgets do not necessary meet the standards hence failing to meet the intended objectives.

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2.14 Reports and records

Reports are documents characterized by information or other content reflective of inquiry. According to

“Hill and Dale”, a report is a written document describing the findings of individual or group. Reports can

include financial reports, council reports, and performance reports among others. Financial reports are

formal records of a business’ or organizations financial activities.

Records are documents relating to the receipt, management, and disbursement of organizational funds.

These include but are not limited to receipts, minutes of meetings in which financial decisions are made,

bank statements, expense vouchers. The report and records are used by the management for decision

making as they are used for future references to know which period had a decline in revenue collection

and which one had the highest collections. The records and reports are also used for audit purposes and as

supporting documents in case a Local Government is to request for funds from the Central Government

and donors.

Although records are essential in tax administration in Local Governments, they do not always achieve

the desired goal because they are always abused/ misused by the revenue authorities. For example, some

records are doctored by the tax authorities to achieve their selfish ambitions. More so it is common for the

authorities to give misleading information (records) sometimes to climb to political ladders.

2.15 The relationship between revenue collection and service delivery.

The relationship between revenue collection and service delivery can be clearly portrayed by various

rules and regulations governing the Local Governments.

Published reports as well as some tools for integrated planning such as the Local Government act, 1997,

the Local Government financial and accounting regulations, 1998, Compliance with national priorities,

The Local Government budget framework paper, Linkage between the Local Government budget

framework paper and annual work plans as explained below:-

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The Local Government Act, 1997. Local Governments budgetary powers laid down in the Local

Governments Act, 1997, Section 78(1), which states that Local Governments shall have the right and

obligation to formulate, approve and execute their budgets and plans provided the budgets should be

balanced. The Act further states that no appropriation of funds by a Local Government can be made

unless approved in a budget by its council (the Local Governments Act section 83, subsection 1).

Thus the Local Government budget, including the explanatory notes, constitutes the decisive financial

management tool as it forms the legal and operational basis for the implementation of the policies set by

the council in order to deliver services to the public.

Without an approved budget or vote on account, the administration may not collect revenue nor incur

expenditure, and any deviation from this rule may call for appropriate legal action by the relevant

stakeholders. The Local Government Act provides that the Local Government budget shall reflect all

revenues to be collected or received by the Local Government, and to be appropriated for each year

(section 78, sub-section 4). In this way a Local Government serves as an administrative management

instrument providing detailed information about revenues to be collected and the expenditures to carry

out the projects and activities set by the council hence effective service delivery.

The Local Government Financial and Accounting Regulations, 1998. The Local Government

financial and accounting regulations, 1998 make up the principal financial management framework for

Local Governments. The Local Government financial and accounting regulations translates the Local

Government act, as far as financial management provisions are concerned, into operational guidelines

and provides the budget and accounting officers in Local Governments at all levels with detailed legal

and regulatory instructions on most aspects of Local Governments financial management.

The main regulations concerning Local, Government budgets are contained in parts III of the Local

Government financial and accounting regulations 1998. Therefore, the Local Government financial and

accounting regulations enable the Local Governments to collect revenue and thereafter deliver services to

the people.

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Compliance with national priorities. It is a legal requirement for Local Governments to comply with

national priorities by implementing various national programmes to ensure service delivery .the overall

planning framework for Uganda is the poverty eradication Action Plan (PEAP) which sets out the central

Government’s national objectives and strategies for reducing poverty. The medium term expenditure

framework (MTEF) and supporting national budgeting framework paper process (NBFP) is a three-year

rolling budget system that constitutes the link between poverty eradication Action Plan and the budget

allocations for implementation of the various programmes. The central Government ensures that national

priorities are reflected in Local Government budgets through allocation and transfer of conditional grants

to Local Governments.

The Local Government budget framework paper. The Local Government budget framework paper

is one of the three main tools that enable integrated planning and budgeting in Local Governments. The

Local Government budget framework paper articulates the Local Government’s three-year budget

strategy. This is an important decision making tool for the Local Government, which helps to focus the

debate on spending options in the Local Government.

The Local Government budget framework paper provides a profile of the Local Government. It provides

previous financial year revenue performance against revenue budget estimates and revenue projections

for the next three years, provides revenue projections for the next three years, and provides sector

objectives and performance targets for the next three years.

The Local Government budget framework paper also provides indicative allocations and sector objectives

and performance targets for the next three years, show sector unfunded priorities and reallocations of

funding.

Therefore, the Local Government budget framework paper greatly links revenue collection in the Local

Government with the services delivered to the community.

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Linkage between the Local Government budget framework paper and the annual work plans.

Prior to the Local Government budget framework paper, each Local Government review and update its

development plan to cover and include all intended activities for the financial year whether funded by the

central Government, bilateral donors or Local revenue. Each activity will be numbered in the District

annual plan (DDP).The District development plan should be resource constrained but highlight any

priorities that cannot be funded over the medium term. Notably all budgeting should be based on

reference to the activity appearing in the District development plan and accordingly the Local

Government budget framework plan shall summarize the key elements and aggregate allocations and

outputs in the District development plan. As the District development is the main basis on which the

Local Government budget is prepared, the District development plan needs to be up date if the budget is

to be realistic. Every financial Local Governments revise their District development plans to reflect

current resource constraints and new priorities.

Quality of Local budget framework and linkage to national budget framework paper. The Local

Government budget committee is responsible for analyzing and ensuring that the contents of the Local

Government framework paper are in line with the agreed rules of the game as set out initially by Local

Government budget committee. For example, the Local Government budget framework paper must

clearly demonstrate the link to the District development plan, the budget and annual work plan or else it

will not be accepted. The Local Governments also review and collate overall issues in the Local

Government framework paper for submission to the ministry of finance planning and economic

development to be incorporated in the national budget framework paper and budget.

It should be noted that all Local Government budgetary framework papers should have an executive

summary. Its functions are, to set out the key objectives of the District as identified in the District

development plan.

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To set out the key elements of the medium term budget strategy in the Local Government budgetary

framework paper. to highlight major constraints in achieving set output targets, to highlight major

achievements against set output targets, to highlight planned interventions to improve implementation , to

provide the overall financial position of the Local Government including its debt burden, to highlight

changes to grant allocations.

A well-written executive summary should provide the major stakeholders with an easy overview of

important information without going into the detail. The issues in the executive summary are incorporated

by the ministry of finance planning and economic development into the national framework paper to

ensure that the intended objectives are achieved.

Local Government profile. Each Local Government budget framework paper should also include

factual data on the District. This is given in the District profile. This profile among others, serve as a

benchmark for measuring outcomes over time and form the basis for revenue and expenditure projections.

Information in the profile might be ;the size of the District, population, kilometers of main/ feeder roads,

number of primary / secondary schools, number of hospitals and health centres, number of tax payers.

This helps in the linkage of revenue collected to the delivery of services to the people in the District.

2.16 Conclusion.

The literature analyzed shows the various revenues collected, principles of taxation, challenges involved

in revenue collection and depicts the relationship revenue collection and service delivery. It explains

various relevant rules and regulations as regards revenue collection and service delivery in Local

Governments. However, it also highlights the strengths and the weaknesses of the literature reviewed.

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CHAPTER THREEMETHODOLOGY

3.1 Introduction

This chapter dealt with practical procedures that were used for carrying out the study and how data was

collected and analyzed. It portrayed an explicit description of the research design, the survey procedure,

sampling design, sampling procedure, sample size, data collection methods and instruments that were

used by the researcher. The problems that the researcher expected to encounter during data collection and

how he tried to overcome them.

3.2 Research design.The researcher used descriptive and exploratory survey research designs based on results from

questionnaires, interviews and observation. Both qualitative and quantitative research designs were used

in this study. Qualitative data was obtained through questionnaires, interviews and observation while

quantitative data was obtained through computation and analysis

3.3 Sample procedure.

The researcher obtained a letter of introduction from Makerere University research unit, which was

presented to the officer in charge of Iganga District Local Government where the researcher’s case study

was based. The concerned authorities assisted the researcher in the disbursement and collection of some

of the questionnaire forms.

3.4 Population of the study.

The study included the staff of Iganga District Local Government both at the Headquarters and at sub-

counties levels from whom a representative sample was drawn by the researcher to carry out this study.

3.5 Sampling and sampling design.

3.5.1 Survey population.

This was the total possible number of respondents who were chosen. The survey population of this

research included; the staff, revenue officers, revenue collectors, and sub-county chiefs of Iganga District

Local Government.

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3.5.2 Sample size:

This was the choice of a number of people who provided data from which conclusions were drawn about

the population. The study constituted seven Sub-county chiefs, ten cashiers, revenue officer, ten Accounts

Assistants, the Chief cashier and the District accountant totaling 30 people.

Table 1: The sample size of the respondentsRespondents Number of respondentsDistrict accountant 1Revenue officer 1Sub-county chiefs 7Accounts assistants 10Chief cashier 1Cashiers 10Total 30

Source: Primary data.

3.5.3 Sampling design.The study was carried out using cluster-sampling technique. Cluster sampling technique is a simple

random sampling method in which each sampling unit is a collection or a cluster of elements. Cluster

sampling was used because the method was particularly useful as the population to be studied was

scattered over a wide geographical area. Employees and senior citizens were put under different job

categories to get data from each category.

3.6 Sources of data.

The researcher used both primary and secondary data. Primary data was collected through direct

interactions with the respondents in one form or through personal interviews as well as observation.

Secondary data was obtained from various publications of the central and Local Governments, technical

and trade journals, books, magazines and newspapers, published records and statistics, historical

documents and other sources of published information.

3.7 Data collection methodsThe researcher collected the primary data by use of questionnaires, interviews as well as the observation

method and secondary data was collected by the use of published official documents of the District Local

Government.

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3.7.1 Questionnaire.

A questionnaire is a form containing a series of questions and providing spaces as well as options to be

attempted by the respondents themselves. The questionnaires composed of close-ended questions, open-

ended questions, and leading questions pertaining the research variables and objectives.

3.7.2. Structured Interview.

This is where the researcher asks a standard set of questions and nothing more (leeddy and Ormred 2001).

The researcher carried out a face-to-face interaction with the respondents in order to obtain information

that was relevant and adequate to this research. The face-to-face interview enabled the researcher to

establish rapport with potential respondents and thereafter gain the more needed cooperation and hence

more data. The interviews were carried out in English language since all the participants were more

conversant with it.

3.7.3. Structured observation.

The observation method will be used alongside the methods already mentioned. The researcher will

observe events such as the sources of Local revenue, the problems encountered by both the tax collectors

and taxpayers

3.7.4. Official Documents.The secondary data or information will be obtained mainly from the documents and records of Iganga

District Local Government for example, the revenue enhancement plan and budgets for the recent

financial years, and minutes of different meetings, text books, journals and news papers.

3.8. Data analysis.The raw data that was collected from the field was scrutinized, and analyzed by editing, coding and

employing descriptive statistics in order to give more meaning to the data. The data was then edited in

order to screen the relevant data from the raw data that would carry meaning to the study. During this

process, the researcher translated the data into numerical figures to add meaning and easy understanding

of the data. The results then were presented in form of percentages, frequency tables and graphs for easy

comprehension and later deductions were made from the analyses.

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3.9 Research variables and their measurements.The independent variable was revenue collection while the dependent was service delivery. The

independent variable and the dependent variable were measured using statistical methods such as

correlation analysis, chi-square.

3.10. Encountered problems and Solutions

The major problem encountered was the unwillingness or lack of cooperation from the respondents.

This is because the study being investigative in nature it created suspicion among the respondents

especially the District Local Government staff. The problem of unwillingness of the respondents to

cooperate fully with researcher was dealt with by explaining to the respondents the purpose of the

research. This will helped to reduce on fear or suspicion among the participants

Lack of funds was a big hindrance during the study and it threatened to bring the work to a halt. This

was because the study necessitated constant movements, stationery materials like papers, pens and more

so typing and printing some data. The problem of lack of enough funds to carry out the research was

reduced by selecting a small sample size and carrying out work within the proximity of the researcher to

reduce on the rate movements.

There was a problem of data collection. This threatened to be a hindrance to the smooth running of the

study as various data collection methods were used. However, the researcher dealt with the problem by

using various data collection skills learned from the various authors about research methods.

Time constraint was a challenge to the study, as the researcher found it difficult to apportion time

appropriately. Even the free time of the respondents could not match with that of the researcher. The

researcher tried to be precise to overcome time constraint. For example, by asking respondents direct

questions that needed direct answers, summarizing the collected data.

35

There was a challenge in the construction of the standardized questionnaires. As regards the

construction of standardized questionnaires, the researcher dealt with it by consulting some literature

about good questionnaire construction as well as getting some technical tips from the research supervisor.

Lack of readily available research material threatened to infringe on the research study. The researcher

dealt with the challenge by reading official documents of the District Local Government, various

framework papers for Local Governments, Newspapers, interviewing the Local Government staff as well

as observation.

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CHAPTER FOURPRESENTATIONS, ANALYSIS AND DISCUSSION OF FINDINGS.

4.1 Introduction

This chapter presents the analysis, discussions and findings on the effectiveness of revenue collection and

service delivery in Local Governments. The research presentations, analysis and discussion of the

findings were guided by the following research objectives:-

i. To examine the challenges Iganga District faced in the collection of revenue.

ii. To examine how service delivery in Iganga District Local Government could be improved.

iii. To establish the relationship between revenue collection and service delivery in Iganga District

Local Government.

4.2 Demographic data

4.2.1 Gender of respondents

The researcher asked the respondents questions regarding their gender status and he obtained the

following responses:-

Table 2: Gender of respondentGender Frequency Percentages (%)Male 15 50Female 15 50Total 30 100

Source: Primary data

The responses showed that 50% of the respondents were female just as 50% were males. This showed

that the research findings were not gender biased as both sexes were equally represented. It also implied

that the District Local Government’s labour force is not gender biased.

37

4.2.2 Age of respondents.

The researcher asked the respondents questions regarding their age and obtained the following responses:-

Table 3: Age of respondents.Age bracket Frequency(years) Percentages (%)20-30 8 26.730-40 11 36.740-50 8 26.750-above 3 10Total 30 100

Source: Primary data

The results showed that that 26.7% of the employees of Iganga District Local Government were between

20 and 30, 26.7% were between 40 and 50 while 10% were above 50 years of age. The findings indicated

that the Local Government employed a great percentage of workers who were energetic and versatile.

4.2.3 Education level of students of respondents. As regards the level of education among the

respondents, the researcher obtained the following results:-

Table 4: Showing the education level of the respondentsQualifications No. of respondents Percentage (%)Degree 6 20Certificate 10 33.3Diploma 14 46.7Total 30 100

Source: Primary data.

The research findings showed that 20% of the workers were graduates, 46.7% were diploma holders, and

33.3% were certificate holders. The highest percentage of diploma holders showed that the District Local

Government employs workers who were moderately qualified and the researcher recommended that such

workers should go for further education.

38

4.3. Challenges in revenue collectionThe respondents were asked questions regarding the most challenging factors that led to a decline in local

revenue collection in Iganga District Local Government and it yielded the following results:-

Table 5: The responses on challenges in revenue collectionResponses Frequency Percentage (%)Poor tax collection systems 3 10Inadequate sensitization 4 13.3Traditional defaulting 5 16.7Suspension of graduated taxes 8 26.7Political interference 10 33.3Total 30 100

i Source: Primary data

The researcher’s findings showed that 33.3% requested for a check on political interference, 10% cited

poor tax collection systems, 13.3% cited inadequate sensitization, 16.7% cited inadequate sensitization of

the masses, and 16.7% cited traditional defaulting, while 26.7% cited suspension of graduated tax.

Therefore, the highest percentage of 33.3 indicated that there should be strong measures to deal with

political interferences.

Figure 2: Challenges in Revenue Collection.

Source: Primary data

39

As shown by the graph above, the findings reveal that the most challenging factor leading to declining

Local revenue collections was suspension of graduated tax, followed by political interference but these

are inter-linked. This means that the major cause of declining revenue collection in local authorities

particularly in Iganga District Local Government is majorly political interference.

The participants were presented with optional questions regarding the challenges in revenue collection

and the following results were obtained:-

Table 6: Responses to Challenges in Revenue CollectionResponses Frequency Percentage (%)Strongly agree 10 33.3Agree 9 30.0Yes 5 16.7Disagree 2 6.7Strongly disagree 2 6.7No 2 6.7Total 30 100

Source: Primary data

The responses to the optional questions in the questionnaire forms implied that approximately 75% of the

participants were of the view that Iganga District Local Government faced great challenges as far as

revenue collection is concerned. Through interactions with the respondents, the researcher observed that

the challenges that the District Local Government faced were recurrent and inherent in the administrative

setup.

Through observation, the body language of the participants seemed to suggest that the challenges facing

the District authorities were part of life and could not be solved. It seemed as though it was by default and

design that the Local Government faced such challenges in revenue collection.

4.4. How revenue collection can be improved.The responses to the research questions were summarized into a table to determine the most highly

recommended solutions for improving local revenue collection in Iganga District Local Government.

40

Table 7: How revenue collection can be improved Responses of participants Frequency Percentage (%) Research for suitable tax base 1 3.3 Improving tax revenue collection systems 1 3.4 Reduction of political interference 3 10 Privatization of collection revenue. 3 10 Training tax collectors 3 10 Motivation of revenue tax collectors 6 20 Sensitization of communities 13 43

Total 30 100 Source: Primary data

The findings revealed that 3.3% recommended research for suitable research bases, 3.4 % advocated for

improved tax revenue collection systems, 10% called for a reduction in political interference. The

findings revealed that sensitization of the masses was a key factor in the improvement of revenue

collection

Chart:2 Ways of Improving Revenue Collecton in Iganga District Local Government

Source: Primary data

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The responses as per the line graph above show that sensitizing the entire community that contributes the

revenue was the main solution to improve the declining revenue collections in Local authorities.

Recommendation for sensitization of the masses appeared. Then, followed motivation of all those who

engage in revenue collection either directly or indirectly. Trying to reduce political interference,

privatization of revenue collection services and thorough training of tax collectors were recommended

several times

.

Still in response to increase in revenue collection there were varrying reactions to the various answers to

the questionaires presented and these were summarised as depictedin the table below;

Table:8 Responses to increase in revenue collectionResponses Frequency Percentage (%)Strongly agree 15 50Agree 10 33.3Disagree 3 10Strongly disagree 2 6.67Total 30 100

Source: Primary data

In response to the issue of revenue collection, the findings showed the folowing results:- 50% of the

respondents strongly agreed,33.3% agreed, 10% disagreed and 6.67% strongly disagreed. The highest

percentage of 50% signified that there was strong need to improve revenue collectionin Iganga District

Local Government.

4.5.Significance of budgets versus actual collections, reports, and recordsThe respondents asked questions regarding the role of the budget, reports and records and the following

results were obtained:-

Table 9: Role of Budgets,Reports and Records.Responses Frequency Percentage (%)Agree 12 40Strongly Agree 13 43.3Disagree 2 6.67Strongly disagree 3 10Total 30 100

Source: Primary data.

42

The research findings showed that 6.67 respondents disagreed with the questions asked 43.3% strongly

agreed, 10% strongly disagreed, while 40% agreed. The highest response (43.3%) signified records,

budgets and reports were very instrumental as far as revenue collection and service delivery were

concerned in Iganga District Local Government.

4.6. The relationship between Local revenue collection and service delivery The respondents were asked whether poor service delivery in Iganga District Local Government was

mainly caused by poor performance in revenue collection and their responses were summarized as per

the table below:-

Table 10: Relationship between Local revenue collection and service deliveryResponses of participants Frequency Percentage (%)Strongly agree 15 50Agree 8 26.7Strongly disagree 3 10Disagree 4 13.3TOTAL 30 100

Source: Primary data

The findings revealed that 15 out of the 30 respondents (50%) strongly agreed, 26.7%] agreed, 10%

strongly disagreed and 13.3% disagreed. Since the majority of the respondents strongly agreed, this

implied that declining revenue collection in Iganga District Local Government majorly led to poor service

delivery.

4.7 INFERENTIAL STATISTICS 4.7.1 Pearson correlation test Table 11: Correlation between Revenue Collection and Service Delivery. Correlations

Revenue Collection

Service Delivery

Revenue Collection Pearson Correlation Sig. (2-tailed) N

1.000. 30

•943** .000 30

Service delivery Pearson Correlation Sig. (2-tailed) N

•943** .000 30

1.000

30 **. Correlation is significant at the 0.01 level (2-tailed). Source: Primary data.

43

The Pearson’s correlation test shows a strong relationship between revenue collection and service

delivery. This could be significantly noted from the positive correlation between revenue collection and

service delivery. That is to say (r=0.943**,p< 0.01).The results signified that Local Government

authorities could effectively deliver services to the community given the increase in revenue collection.

Therefore, the researcher recommends that for effective service delivery, there should be increase in

revenue collection in Local Governments.

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CHAPTER FIVESUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS.

5.1 Introduction

This chapter includes the summary of findings, conclusions, and recommendations of the study.

5.2 Summary of the findings:

5.2.1 Challenges faced in the collection of revenue

The study depicted that the District Local Government faced various challenges as far as revenue

collections was concerned, ranging from social, economic as well as political spheres of life. However,

the study showed that such challenges were inherent in the political setup of the Local Governments and

were deep rooted in all the social and economic structures of the District Local Governments.

5.2.2 Improvement in revenue collection.

The research findings showed that even though most of the challenges were inherent in the structures of

the Local Government, they were not beyond control. It showed that low or poor revenue collections

within the District Local Government could be improved by implementing various policies, such as;

motivate the tax authorities, check on political interference, sensitizing communities, privatization of

revenue collection services, increase on Government grants to Local Governments.

5.2.3 Budgeted versus actual collections, reports and records.

Significantly, the findings depicted the budget as an important financial as well as management tool as far

as revenue collection and service delivery were concerned. The research findings showed that the budget

along with reports and records are key tools in the whole system of tax assessment, collection as well as

administration.

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5.2.4 Relationship between revenue collection and service delivery.

The findings clearly showed that there was a strong relationship (r=0.943**,p< 0.01) between revenue

collection and service delivery in Local Government as. For example, the findings depicted that service

delivery increased with increase in revenue collection and decreased with decrease in revenue collection.

This could be noted from the various services like roads financed by Local Governments as well as

services like garbage collection in urban centres within the District Local Government.

5.3 Conclusions:Basing on the main research objective or question of this research, that is to say examine the relationship

between revenue collection and service delivery in Iganga District Local Government, it was established

that service delivery in Local authorities has a direct relationship with Local revenue collections. Largely,

Iganga District Local Government had registered a fundamental decline in service delivery because of

poor revenue collections.

Worth noting is that Local Revenue Collections could generally be improved by sensitizing the entire

community from which revenue is collected. Therefore, even though Iganga District Local Government

undertook various procedures and plans to improve Local revenue collection figures to a certain extent,

there is still much to improve the Local revenue collection for better service delivery.

5.4 RecommendationsFollowing the findings, the researcher calls to address the main challenges that contribute to the declining

trend of Local revenue collections in Local authorities that include, political interference, poor tax

collection systems, inadequate facilitation, traditional defaulting. Such challenges should be addressed

using the following measures as analyzed below:-

Motivating revenue collectors. The tax collectors should be highly motivated. For example, they

should be given moral support from the District Local Government authorities.

Motivation should also be in form of incentives like high salaries, high wages adequate security or

protection from the would be threats to the lives of the tax collectors.

46

Trying to mobilize politicians not to interfere in revenue collection. The politicians should draw a

clear line between their role and that of the tax authorities. They should be called upon to be professional

in the approach as well as ethical for the proper running of the District affairs. For example, they should

not be a safe haven for the tax defaulters.

Assessment /Enumeration. There is need for proper tax assessment. This will enable the taxpayers to

know the amount of revenue they are supposed to contribute. This may involve analyzing the various tax

bases within the Local Government.

Sensitizing the entire community. The masses should be sensitized about the benefits of paying taxes.

For example, they should be enlightened that their contribution in form of taxes leads to effective service

delivery.

Privatization of revenue sources. The District Local Government authorities should privatize the

collection of revenue in the District. This will enable increased revenue (income) as the private firms will

ensure that the loopholes in the tax system are bridged or purged.

Training revenue collectors. The revenue authorities should be further sensitized about their role. For

example through seminars, and others should be given scholarships by the District Local Government to

go for further studies and acquire more skills. This will help to check on inefficiency due to inadequate

education.

5.5. Suggested areas for future study.

This section suggests areas for further reading by the future researchers on Local revenue collection and

service delivery in Local authorities. These areas are as seen below:-

The other factors that affect Local revenue collection as well as service delivery should be put to research

for ascertainment of their effects.

The future researchers should use other statistical research methods such as the Chi-square regression

analysis to prove whether there is a strong relationship between revenue collection and service delivery as

the researcher reflected in his findings.

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Although Iganga District Local Government undertakes various procedures and plans to improve Local

revenue collection, the situation is still alarming which calls for further inquiry to ascertain the cause the

appalling economic situation for better service delivery.

48

REFERENCE:

American Business Dictionary. Definitions of revenue enhancement plan

Dumba S. Basic Economics for East Africa, Uganda’s Recovery (2004)

“Hill and Dale” Report writing

Gopalan Workbook on community based rehabilitation services. Vikas, Bangalore (1992)

Iganga District Local Government’s Minutes. MIN.04/LGC/2006

Iganga District revenue enhancement plans,(2006/2007,2007/2008,2008/2009)

ML JHINGAN: Money, Banking, International trade and public finance 7 th edition. Trends in tax

revenue and expenditure of centre and state Government in India (Page 837-838)

Income tax Act 1997(October 11 1997), LDC Publishing Pres , Kampala Uganda

Mugume Christine, Managing Taxation in Uganda First Edition, MPK Graphics, Kampala

Uganda ,2006

The Constitution of the Republic of Uganda 1995. Articles 191(2) and 193(1).The Constitution of

the Republic of Uganda.

The local government Act 1997, Article 193(1) section 84, section 78(1) Published by the Ministry of Local Government Uganda.

The Local Government Finance and Accounting Regulations (LGFAR) 1998. Section 31(10 a, ( d) and 31(6) regulations 25 and 26 Published by the Ministry of Local

Government Uganda.

49

The New Vision (Monday July 5 2010) Report pins politicians over tender boards, The New

Vision Publishers Kampala Uganda 2010

Tumuhimbise. M. .Introduction to Tax in Uganda ,Makerere business school, first edition 2002

Wikipedia, the free encyclopedia, Internet Source.

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APPENDICES

QUESTIONNAIRES

IMPACT OF REVENUE COLLECTION ON SERVICE DELIVERY IN LOCAL GOVERNMENTS. CASE STUDY: IGANGA DISTRICT LOCAL GOVERNMENT.

A RESEARCH QUESTIONNAIRE TO BE FILLED IN BY THE STAFF OF IGANGA DISTRICT LOCAL GOVERNMENT.

Dear Sir/Madam,

My name is MUKOOLI ROBERT, registration number O5/U/9187/EXT an undergraduate student of

Makerere University pursuing a degree in Bachelor of Commerce (Accounting option). I am currently

carrying out a study about the impact of revenue collection on service delivery in Iganga District Local

Government as a requirement for the award of a degree of Bachelor of Commerce.

I humbly request you to be one of the participants in this study and your cooperation will be of great

importance to this study. Your answers will be kept with utmost confidentiality.

Thank you very much for your time and cooperation.

PART A: PERSONAL DATA

1.a) Name -----------------------------------------------------------------------------------------

b) Sex

i. Male ii. Female

c) Age

i. 20-30 years ii. 30-40 years

iii. 40-50 years iv. 50 and above

2 .a Participant’s qualification

i. Certificate ii. Diploma

iii. Degree iv. Other

57

b) For how long have you served in Iganga District Local administration?

i. Less than a year. ii. 1-3 years

iii. 2-5 years iv. 5-10 years

iv. More than 10 years

c) Position held in the District Local Government?

i. Cashier ii. Accountant

iii. Sub county chief iv. Other

PART B: CHALLENGES IN REVENUE COLLECTION

3. a) Does the District Local Government face any challenges in revenue collection?

i. Yes ii. No

b) Tax avoidance, tax evasion, and political interference are the main challenges in revenue collection.

i. Agree ii. Strongly agree

iii. Disagree iv. Strongly disagree

4. a) The challenges in revenue collection are recurrent /frequent

i. Agree ii.Strongly agree

iii. Disagree iv. Strongly disagree

b) The Local Government is partly responsible for poor revenue collection

i. Agree ii. Strongly agree

iii. Disagree iv Strongly disagree

5. a) The complicated Local Government rules and regulations are partly a challenge as far as revenue collection is concerned

i. Agree ii. Strongly agree

iii. Disagree iv Strongly disagree

b) The challenges encountered in revenue collection are inherent in the whole tax system

i. Yes ii. No

6. Briefly state at least two challenges faced by the Local authorities in revenue collection

i.-------------------------------------------------------------------------------------------------------

ii-------------------------------------------------------------------------------------------------------

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PART C: IMPROVEMENT IN REVENUE COLLECTION

7. a) Revenue collection in Iganga District Local Government needs to be improved.

i. Agree ii. Strongly agree

iii. Disagree iv Strongly disagree

b).What steps should the Local Government take to improve on Revenue collection? State at least two.

i. ----------------------------------------------------------------------------------------------

ii. ---------------------------------------------------------------------------------------------

8 a).The central Government should help Local Governments to improve on their revenue collections i. Agree ii. Strongly agree

iii. Disagree iv Strongly disagree

b) The central Government should increase on its grants to the District Local Governments to improve on revenue collection.

i. Agree ii. Strongly agree

iii. Disagree iv Strongly disagree

9 a) There is need to amend the existing rules and regulations that guide Local Governments in the collection of revenue.

i. Agree ii. Strongly agree

iii. Disagree iv. Strongly disagree

b) Local Governments should enact strong laws that deal with tax evasion and tax avoidance in the collection of revenue.

i. Agree ii. Strongly agree

iii. Disagree iv Strongly disagree

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PART D: BUDGETED VERSUS ACTUAL COLLECTIONS, REPORTS AND RECORDS.

10. a) The Local Government use the budgeting process to ensure revenue collection and service delivery i. Agree ii. Strongly agree

iii. Disagree iv Strongly disagree

b) The District Local Government formulates deficit budgets to enhance revenue collection and service delivery.

i. Agree ii. Strongly agree

iii. Disagree iv Strongly disagree

c) The District Local Government greatly includes donor funds in their estimated incomes and expenditures (budgets)

i. Agree ii. Strongly agree

iii. Disagree iv Strongly disagree

11. a) Does the Local Government keep records?

i. Agree ii. Strongly agree

iii. Disagree iv. Strongly disagree

b) Records greatly assist as far as revenue collection and service delivery are concerned.

i. Agree ii. Strongly agree

iii. Disagree iv. Strongly disagree

i

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PART E: RELATIONSHIP BETWEEN REVENUE COLLECTION AND SERVICE DELIVERY.

12. a) Does the District Local Government utilize its revenue to provide services to the People? i. Agree ii. Strongly agree

iii. Disagree iv Strongly disagree

b) The public gets services depending on the revenue collected by the District Local Government-------------

i. Agree ii. Strongly agree

iii. Disagree iv Strongly disagree

13. a) The Local Government provides various services from the revenue it collects

i. Agree ii. Strongly agree

iii. Disagree iv Strongly disagree

14. a) Service provision reduces with reduction in revenue collection and vice versa.

i. Agree ii. Strongly agree

iii. Disagree v Strongly disagree

b) Service provision is a priority as far as the expenditures of District Local Government are concerned

i. Agree ii. Strongly agree

iii. Disagree iv Strongly disagree

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15 a) Revenue from donor funds is primarily used to provide basic services to the community

i. Agree ii. Strongly agree

iii. Disagree iv Strongly disagree

b) Revenue from donor funds is used to finance deficit budgets to provide services to the community.

i. Agree ii. Strongly agree

iii. Disagree iv Strongly disagree

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16 a) The central Government provides various grants to Local Governments to enable the provision services to the community

i. Agree ii. Strongly agree

iii. Disagree iv Strongly disagree

b) The central Governments ensures that its grants to Local Governments are suitably utilised to provide services to the community i. Agree ii. Strongly agree

iii. Disagree iv Strongly disagree

17) The Local Government follows various rules and regulations during revenue collection and service delivery

i. Agree ii. Strongly agree

iii. Disagree iv Strongly disagree

END Thank you for your cooperation

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