TAXED ON PEANUTS! Urban Council Speakers Protest 40% Levy on Their Allowances

The Uganda Urban Council Speakers Association has challenged the government’s decision to impose a 40 per cent withholding tax on allowances paid to elected leaders in urban councils, saying the deductions leave them with little income to support their work.

The tax, which the Uganda Revenue Authority (URA) applies as a “Secondary Employment Rate”, has affected district leaders and councillors at lower administrative levels during the current financial year.

URA treats the allowances as income from secondary employment, subject to the applicable marginal tax rate.Elvis Katongole, the Speaker of Mpigi Town Council, said councillors receive as little as 35,000 shillings every two months, yet the money is also subjected to taxation.He questioned why leaders at the lower administrative levels face such deductions when their allowances are modest.

Katongole also cited a lack of offices and transport as challenges affecting their work.

Bonny Tashobya Karusya, the outgoing president of the Uganda Urban Council Speakers Association, said the leaders were prepared to seek an audience with the President or stage a protest if their concerns were not addressed.

Tashobya argued that speakers should receive salaries instead of ex-gratia payments or sitting allowances, saying their responsibilities require them to work full-time.

He said the current payment arrangements, coupled with the tax deductions, leave councillors with limited financial support despite their responsibilities, which include monitoring government programmes, overseeing service delivery and representing their communities.

Marinah Salma, the association’s deputy treasurer, called on the Ministries of Local Government and Finance to reconsider how elected local leaders are treated, arguing that their responsibilities and knowledge of the communities they serve should be recognised.

The speakers and their deputies are meeting in Mbarara City for the Uganda Urban Council Speakers Association’s 2026 annual general meeting, which also includes elections for a new executive committee.The delegates are expected to vote on Wednesday to elect new leaders following the expiry of the current executive’s term, which began in 2021.