Overview:
Sam Kigula, the LCV Chairman of Nakasongola District, agreed with the Auditor General’s findings, noting that unreliable internet connectivity continues to frustrate electronic revenue management.
Local Governments have blamed taxpayers’ resistance and persistent system failures for undermining revenue collection, following the Auditor General’s revelation of a Shillings 52 billion shortfall.
District leaders say delays in fixing weaknesses in the Integrated Revenue Administration System (IRAS) have created loopholes that some staff exploit, worsening revenue leakages.
Sam Kigula, the LCV Chairman of Nakasongola District, agreed with the Auditor General’s findings, noting that unreliable internet connectivity continues to frustrate electronic revenue management.
“The district staff are now using the gaps, like a lack of internet connection, to collect taxes and pocket them, hence affecting district revenue. Nakasongola is among the hard-to-reach areas where the internet is not readily available, so it’s impossible to use IRAS in such areas,” Kigula said.
In Luwero District, officials also cited network failures affecting IRAS operations in several sub-counties, including Makulubita, Kamira, Kikyusa, and Bamunanika. District authorities said they were engaging IRAS administrators at the Ministry of Finance and the Ministry of Local Government to address the challenges and improve collections.
The reactions follow the Auditor General’s report, which shows that out of the budgeted Shillings 248 billion across 124 Local Governments for the Financial Year 2024/25, only Shillings 196 billion (79 per cent) was collected, leaving a deficit of Shillings 52 billion (21 per cent).
Despite growth in local revenue collections, increasing by Shillings 66.98 billion (54 per cent) from Shillings 124.89 billion in FY 2021/22 to Shillings 191.87 billion in FY 2023/24, the Auditor General warned that Local Governments are still struggling to meet annual targets.
Accounting Officers attributed the shortfall to taxpayers’ resistance, IRAS system challenges, understaffing in revenue departments, particularly in new urban councils, and inadequate Point of Sale (POS) machines critical for field revenue collection.
A review conducted in a sample of 30 Local Governments found that limited ICT competencies and insufficient training continued to hamper effective IRAS implementation. Staff lacked adequate skills in system functionalities such as assessment, receipting, reconciliation, and reporting.
The Auditor General further observed that 18 Local Governments faced unstable internet connectivity, frequent system downtimes, and delayed technical support, while 22 Local Governments reported shortages of POS machines and related ICT equipment.
“The limited number of devices constrained coverage at revenue collection points and resulted in congestion, delays, and occasional resort to manual receipting. This increased the risk of revenue leakages, incomplete data capture, and weakened audit trails,” the Auditor General noted.
The report also highlighted resistance among taxpayers, especially in rural areas, where illiteracy and limited understanding of electronic payment systems contributed to disputes and delays.
To address the challenges, the Auditor General recommended that Accounting Officers work closely with the Local Government Finance Commission and other stakeholders to strengthen system effectiveness and enhance local revenue performance.
The shortfalls, the report warned, continue to disrupt planned activities and negatively impact service delivery.
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