“We Shall Fight”: Property tax row deepens as Jomo, Barekye clash over revenue remittances

By Amos Tayebwa – Mbarara

A bitter dispute over property tax revenue has erupted in Mbarara City, with Mbarara City South Division Mayor-elect Jomo Mugabi threatening to take action against City Town Clerk Justine Barekye and City Mayor Robert Mugabe Kakyebezi over what he describes as unfair remittances to division councils.

Mugabi claims that although Mbarara City South Division generated approximately UGX 1.5 billion in property tax during the 2025/2026 financial year, only UGX 220 million has been returned to the division, leaving it struggling to deliver essential services to residents.

According to Mugabi, the law requires revenue-sharing between the city authority and its divisions, but this has not been effectively implemented in Mbarara City. He argued that divisions prepare budgets based on expected remittances from the city, only to face delays and shortfalls that undermine planned projects.

The mayor-elect further criticized the city leadership for failing to establish a committee that would oversee the release and utilization of property tax funds, saying such a mechanism is necessary to ensure transparency and accountability.

“We want our rightful share of the money. If this property tax issue is not resolved, we shall fight for it. My division contributes the largest portion of property tax revenue, yet the amount returned to us is minimal. This is not about personal gain but about ensuring taxpayers see value from the taxes they pay,” Mugabi said.

He accused the city authorities of mismanaging the funds and warned that if the matter remains unresolved, the division would petition oversight bodies, including the Inspector General of Government (IGG), auditors, and area MP Mwine Mpaka, to investigate the collection and use of property tax revenue.

Mugabi also threatened to mobilize residents to stop paying the tax if they continue seeing little benefit from it.

“The Town Clerk and Mayor Kakyebezi should stop treating divisions as subordinate entities. We are independent local governments and must be allowed to plan and budget effectively. Roads in my division remain in poor condition despite the huge amount of revenue collected there,” he added.

Responding to the accusations, Town Clerk Justine Barekye defended the city’s handling of the tax, insisting that property tax is administered by the city center and is not subject to revenue sharing in the manner some division leaders claim.

She explained that divisions are allocated Indicative Planning Figures (IPFs) and that remittances are made as funds become available. According to Barekye, the city has already begun releasing funds and remains focused on service delivery.

Barekye noted that Mbarara City has budgeted UGX 3.5 billion from property tax this financial year, although not all of the projected revenue has been collected.

She explained that property tax is imposed on owners of taxable properties such as commercial buildings, rental units, factories, offices, hotels, and other income-generating real estate. The revenue supports public services including road construction and maintenance, drainage systems, garbage collection, urban planning, land titling, house numbering, street lighting, beautification projects, and the construction of health and education infrastructure.

The Town Clerk further argued that property tax is governed by the Local Governments Rating Act, 2005, which requires the funds to be used strictly for service delivery purposes.

“All property tax collections are deposited into a dedicated fund and can only be spent on services. This revenue source is not shared with divisions. Unlike other local revenue sources, even councillors cannot receive allowances from it because it is ring-fenced for public services,” Barekye explained.

She attributed delays in remitting other revenue sources to the recent election period but assured leaders that remittances would resume normally now that elections have concluded.

Barekye also revealed that city officials are scheduled to meet division leaders this week to brief them on the legal framework governing property tax management and clarify the city’s position.

Meanwhile, Mbarara City South Division Speaker Godfrey Tumusiime challenged the Town Clerk’s interpretation of the law, urging her to revisit Section 37 of the Local Governments Rating Act, which he says provides for local governments to collect rates and receive their share through remittances.

“We shall continue pushing until our money is released. Taxpayers deserve accountability, and enough is enough. We are ready to involve higher authorities to ensure these funds are remitted as required,” Tumusiime said.

The dispute has exposed growing tensions between Mbarara City’s central administration and its divisions, setting the stage for a potential legal and political battle over the management of property tax revenues.