KAMPALA, Uganda (UGNEWSLINE) – The Local Government Finance Commission (LGFC) has set a target of raising local government revenue collection to Shs1 trillion annually by the 2028/2029 financial year, up from the current Shs442 billion, to improve service delivery across the country.
The commission says strengthening the capacity of local governments to mobilise, collect and manage their own-source revenue will reduce their dependence on central government transfers and enable districts, cities and municipalities to respond more effectively to community needs.
The target was announced on Tuesday, October 13, 2026, by commission vice chairperson Mariam Nalubega during an engagement with journalists ahead of the first National Local Revenue Mobilisation Conference scheduled for Thursday, October 15, at Hotel Africana in Kampala.
Nalubega said local governments need to increase revenue collection to address service delivery challenges that cannot always be met through funds transferred from the central government.
She explained that most central government transfers are earmarked for specific activities, including the construction of schools, payment of teachers, health services and water provision, leaving local governments with limited flexibility to address other urgent community needs.
“When a school is hit by a storm, the local government cannot just sit and cry. It must find a way of addressing the problem. That is why local revenue is important,” Nalubega said.
She noted that locally generated revenue can help authorities address challenges such as damaged roads, waste management and other community needs that may not receive immediate funding from the central government.
Local governments collect revenue from sources including property rates, local service tax, hotel tax, trading licences, markets and other fees charged for services and facilities.
Nalubega said the commission is prioritising capacity building, training and technical support to help local governments identify revenue sources, improve collection systems and ensure that the money collected is used to benefit communities.
“Our focus is to ensure that local governments can finance their own service delivery requirements,” she said.
The commission, however, clarified that it does not directly collect or handle local government revenue. Instead, it provides technical guidance and oversees systems designed to improve revenue administration and accountability.
Commission Secretary Adam Mbabale said local governments have several legally recognised revenue sources, although the applicable charges depend on the services provided, facilities accessed and activities being regulated.
He explained that not all payments made to local governments are taxes, noting that some are user fees, licences or charges for accessing public facilities and services.
According to Mbabale, the commission recognises about 37 local revenue sources, although some apply only to particular businesses, properties or services.
He added that the commission also assists local governments in developing bylaws, building technical capacity and addressing legal challenges that may affect revenue collection.
Digital system to improve accountability
The commission has spearheaded the digitisation of local revenue collection through the Integrated Revenue Administration System (IRAS), which enables authorities to monitor collections and strengthen accountability.
Senior Manager for Revenue and Research Fred Andema said the system allows the commission to monitor how much individual local governments collect, including revenue generated from markets and trading licences.
He said the digitisation reform is intended to improve transparency, reduce revenue leakages and provide reliable information on the performance of local governments.
Under the system, local governments collect their revenue, which is remitted to the Consolidated Fund, while the commission monitors the process through the digital platform.
The commission announced that the IRAS rollout has reached 175 local governments, in addition to Kampala Capital City Authority (KCCA).
The full rollout is expected to be formally commissioned by the Speaker of Parliament, who is the chief guest at Thursday’s conference.
Conference to recognise best-performing local governments
The National Local Revenue Conference will bring together local government political and technical leaders, officials from the Ministry of Finance and the Ministry of Local Government, Parliament, development partners, civil society organisations and other stakeholders.
Organisers said the conference will review local government revenue performance during the 2025/2026 financial year, examine collection trends and identify strategies for increasing revenue and improving expenditure management.
The meeting will run under the theme, “Strengthening Local Revenue Mobilization for Sustainable Fiscal Decentralization and Improved Service Delivery,” with the tagline, “Advancing Public Finance Management Reforms Beyond Automation.”
Participants will also discuss how locally generated revenue can be managed prudently and directed towards essential services.
A documentary highlighting how selected local governments have used their own-source revenue will be screened during the conference.
The event will also feature a panel discussion on promoting public sector excellence through prudent local revenue mobilisation and expenditure.
The commission will recognise 10 best-performing local governments for their performance in collecting, managing and expanding own-source revenue.
The awards will comprise three cities, three municipal councils and four district local governments.
Organisers said the categories were designed to ensure fair comparisons between local governments with different sizes, resources and revenue-collection capacities.
Nalubega said the awards are intended to motivate local governments to improve their performance rather than portray those that do not win as failures.
She noted that some local governments have demonstrated how revenue can be reinvested in service delivery by purchasing garbage trucks, acquiring vehicles for revenue mobilisation and constructing public buildings.
The commission hopes the recognition will encourage other local governments to adopt effective revenue collection and management practices.
Raising revenue beyond automation
Andema said the conference would move discussions beyond the introduction of digital systems to examine how local governments can use improved revenue administration to achieve better results.
He emphasised that increasing collections alone is not enough, adding that local governments must also account for how the money is spent and demonstrate its impact on communities.
The commission believes that improved revenue mobilisation, stronger accountability and better expenditure management will enable local governments to finance more of their development priorities.
Through the conference, the commission hopes to place own-source revenue at the centre of national discussions on fiscal decentralisation and sustainable service delivery.
