The High Court has sided with the Kampala Capital City Authority (KCCA) in its bid to recover millions in unpaid property rates from Shumuk Investments Limited.
The decision, delivered by Justice Patricia Mutesi, grants KCCA a warrant to collect Shs 123 million from Shumuk plus ongoing penalties and legal costs.
The case stems from KCCA’s efforts to enforce property taxes in Nakawa Division. The trouble began around 2018 when KCCA conducted a valuation exercise of all properties in Kampala including the industrial and commercial properties of Shumuk Investment in order to fairly ascertain and revise the rates payable. After the exercise, Shumuk did not object to the rates assigned to its 8 commercial properties.
However, despite being aware of the dues, Shumuk Investments failed to pay up. KCCA issued multiple notices to Shumuk , demanding Shs 105 million as of July 1, 2022, and another on August 10, 2023, for Shs 120 million.
Shumuk Investments did not contest the claims effectively in court. This left KCCA’s evidence unopposed, including account statements showing partial payments in 2019 but major defaults thereafter. Rates were due in two annual instalments on September 30 and December 31.
Justice Mutesi explained the legal basis for the decision, citing Section 62 of the KCCA Act which allows the authority to “levy, charge, collect and appropriate fees and taxes in accordance with any law enacted by Parliament.
She added that this empowers KCCA to implement the Local Governments (Rating) Act within Kampala.
The judge confirmed that no objections were lodged within the 30-day window required by law.
“The Respondent (Shumuk) did not object to the draught valuation list for Nakawa Division within 30 days from the date of its publication in the manner prescribed in Sections 14 – 21 of the Local Governments Act,” Mutesi ruled.
She continued: “If, after the service of the demand notice, the amount is not paid within two months after the service of the notice, the local government may apply to the magistrate having jurisdiction within the area where the property is situated for a summary warrant to recover the amount from the person liable.”
While magistrates can handle such warrants, the amount here exceeded their jurisdiction, so the High Court stepped in. Justice Mutesi noted that “this court has unlimited original jurisdiction in all cases under Article 139 of the Constitution and Section 14 of the Judicature Act.”
In her final orders, Justice Mutesi declared: “A summary warrant hereby issues to the KCCA for the recovery of Shs 123 million due to it in property rates from Shumuk Investement in respect of the industrial and commercial properties located in Nakawa Division and for the recovery of any penalty that continues to accrue thereon at the statutory rate of 2% per month from 28th June 2024 until full payment.”
Mutesi also awarded costs to KCCA.
