By Yusuf Obbo
The business community in Iganga Municipality has expressed outrage over a new tax enforcement operation by municipal authorities, accusing the administration of imposing excessive charges on landlords and tenants without adequate consultation or sufficient notice.
The enforcement exercise, spearheaded by the new Town Clerk, Majerani Luboyera, has reportedly left several shops and commercial buildings closed as property owners and traders struggle to meet the disputed tax demands.
The development has sparked tension between business operators and municipal authorities, with traders warning that the new charges could undermine commercial activity, threaten livelihoods and discourage businesses from operating formally within the municipality.
Kisaka Sharif, the spokesperson for the Iganga Business Community, says the business fraternity is dissatisfied with what he describes as aggravated tax rates imposed on landlords and tenants without proper engagement with their representatives.
Speaking on behalf of the business community, Sharif called on municipal leaders to reconsider the disputed charges, arguing that local revenue collection should not come at the expense of business survival.
Under the reported enforcement measures, business operators are being asked to pay Shs40,000 for each worker employed at their premises, while trading licence fees have also reportedly increased.
Landlords, meanwhile, face a range of property-related charges, including occupation permits, building fees, ground rent, property rates, premium and transfer fees.
Some property owners claim that certain transfer-related charges have risen to as much as Shs2 million. However, the applicable rates and legal basis of the individual charges require clarification from the municipal authorities.
The affected traders argue that the combination of multiple charges, coupled with what they describe as abrupt enforcement, has created an unfavourable operating environment for small and medium-sized businesses.
Sharif warns that excessive taxation could force some traders to close their businesses or relocate beyond municipal boundaries in search of more affordable operating conditions.
The business community fears that the disputed tax measures could produce unintended consequences by pushing traders away from the formal economy.
According to Sharif, when small-scale businesses are subjected to multiple and costly municipal charges, some operators may find it difficult to remain compliant, forcing them either to shut down or relocate outside the municipality.
Such a development could undermine the municipality’s own revenue mobilisation efforts as businesses withdraw from the formal system.
Business leaders also warn that the combined burden of local service charges, trading licences and other municipal fees could significantly reduce profit margins, particularly for small businesses already struggling with operational costs.
They argue that instead of expanding the tax base, excessive charges could discourage entrepreneurs from registering their businesses and complying with municipal regulations.
The community is therefore calling for a balanced taxation approach that enables the municipality to collect lawful revenue while allowing businesses to grow, create employment and contribute to the local economy.
However, Town Clerk Majerani Luboyera maintains that Iganga Municipality has for a long time struggled with tax compliance, accusing some landlords and business operators of exploiting weaknesses within the municipal technical team to avoid paying their obligations.
Luboyera argues that poor compliance has deprived the municipality of revenue needed to support service delivery and other local government operations.
The Town Clerk is now pursuing a tougher enforcement strategy targeting property owners and business operators in an effort to improve revenue collection and ensure compliance.
The operation has reportedly involved the closure of some commercial premises as municipal authorities pursue payment of assessed or outstanding taxes.
While the municipality maintains that revenue mobilisation is necessary, the business community insists that enforcement should be preceded by adequate sensitisation, transparent assessments and meaningful consultations with affected stakeholders.
The dispute has consequently raised questions about how the municipality can strengthen its revenue base without placing excessive pressure on traders and property owners.
A major concern raised by the business community is what it describes as a lack of adequate sensitisation and consultation before the implementation and enforcement of the disputed rates.
Sharif argues that municipal authorities should have engaged business leaders and other stakeholders to explain the proposed charges, their legal basis and the procedures through which taxpayers are expected to comply.
He maintains that the absence of meaningful dialogue has left many business operators frustrated and uncertain about their obligations.
The business community is now calling on the Town Clerk and the Mayor to immediately suspend what Sharif describes as arbitrary, handwritten escalations of the disputed rates pending a comprehensive review.
The traders want municipal authorities to establish a clear, predictable and fair assessment system that takes into account the applicable laws and relevant Ministry of Trade guidelines.
They also want the municipality to provide clear information on the different taxes and fees, explain how assessments are determined and establish procedures through which affected taxpayers can challenge disputed charges.
The business community says an immediate review of the disputed rates would provide an opportunity for municipal leaders and business representatives to resolve the disagreement before more businesses are affected.
Sharif argues that taxation should be administered in a manner that promotes compliance rather than driving entrepreneurs out of the formal economy.
The business leaders are urging the municipal administration to prioritise dialogue, reconsider the disputed charges and give traders sufficient time to understand and comply with the applicable requirements.
They also want the municipality to distinguish between lawful revenue collection and the imposition of charges that may place an unreasonable burden on businesses.
For the traders, the objective is not to evade legitimate taxes but to ensure that the rates imposed are transparent, predictable, legally grounded and affordable enough to allow businesses to continue operating.
The unfolding dispute presents a challenge for Iganga Municipality as it seeks to increase local revenue while protecting the economic interests of landlords, tenants, traders and workers.
Although local governments have a responsibility to collect lawful taxes and enforce compliance, business operators expect the process to be transparent, consistent with the law and supported by adequate public sensitisation.
The closure of commercial premises has heightened concerns about the possible impact on employment, household incomes, business confidence and the availability of goods and services within Iganga town.
Attention is now turning to whether municipal authorities will engage the business community and review the disputed rates in response to the growing concerns.
For now, the business community is demanding an immediate suspension and review of the contested charges, insisting that a fair taxation system should strengthen local revenue without suffocating the businesses expected to generate it.
