Local Government Finance Commission Pushes for Shs1 Trillion Local Revenue Target

The Local Government Finance Commission (LGFC) has outlined an ambitious plan to help local governments raise Shs1 trillion in locally generated revenue.

This was revealed by the Commission’s chairperson Isaac Musumba, while appearing before Parliament’s Committee on Public Service and Local Government, chaired by Martin Ojara Mapenduzi, who also doubles as the MP for Bardege-Layibi Division. The meeting was attended by the State Minister for Local Government, Hon. Victoria Rusoke Busingye, the Permanent Secretary, senior ministry officials.

Musumba said the target is aimed at strengthening fiscal sustainability, reducing over-reliance on conditional grants, and accelerating service delivery at the local level.

Musumba told legislators that the Commission’s work remains central to advancing fiscal decentralisation, improving local revenue performance, and ensuring equitable and transparent intergovernmental fiscal transfers in line with Vision 2040 and the Fourth National Development Plan (NDP IV).

He said the Commission is focusing on four main areas: improving equitable resource allocation, strengthening local revenue mobilisation, enhancing advisory support on fiscal policy, and improving data and monitoring systems for accountability.

“These interventions are meant to empower local governments to deliver better services and drive local economic and social transformation,” Musumba said.

Under its medium-term strategy for the 2026/27 financial year, the Commission will prioritise equity and transparency in resource allocation, strengthen local fiscal autonomy, and enhance its own institutional capacity to deliver on its mandate.

Boda boda levy proposal

One of the key proposals highlighted was the inclusion of boda boda riders in local revenue collection. He  revealed that following advice from Parliament, consultations are underway on a policy that could see boda bodas contribute to local revenues.

“With about 1.2 million boda bodas in Uganda, this initiative alone could raise over Shs100 billion,” he said, adding that only one final stakeholder remains to be consulted before the policy is submitted to Parliament.

Shs25 billion arrears owed to local governments

Musumba also raised concern over Shs25 billion in unpaid property rates owed to local governments by central government ministries, departments and agencies (MDAs), including the police and prisons.

“This money has been established and audited, but it is still being held by MDAs. It has not even been provided for in their budgets,” he said, calling on Parliament to intervene and ensure the arrears are paid.

He noted that the funds could significantly ease pressure on local governments, many of which are struggling to finance basic services and equipment.