Fiscal Decentralization and Local Revenue Generation in Local Authorities: A Case of Rukungiri District - Uganda

ABSTRACT The study explores the relationship between fiscal decentralization and revenue generation in selected sub-counties and divisions of Rukungiri District Local Government. The objectives of the study include: To establish the implication of fiscal decentralization, the effect of assignment of appropriate revenue and functions and to establish the effect of appropriate Intergovernmental transfer systems of local revenue generation in Rukungiri District Local Government were analyzed. The study adopted both qualitative, quantitative approaches and cross sectional design. Data was collected using self-administered questionnaires and face to face interviews. The population was 246 and a sample 106 which was obtained using purposive and stratified sampling methods. 106 respondents were given questioners and 81 (74%) were returned fully answered. The results reveal that there exists a relationship between fiscal decentralization and local revenue generation in Rukungiri District Local Government. The study also revealed that, although there exists fiscal decentralization, its role in supporting revenue generation is minimal since the system doesn’t give absolute powers to lower local governments for instance fiscal decentralization allow local authorities to make bye-laws and ordinances to introduce taxes and rates subject to ministerial approval and if he doesn’t approve, such laws and regulations become useless. Lastly, the central government has effectively decentralized the implementation of services delivery but it’s stronghold on priority setting and funding continues. This implies that local governments planning and implementation organs of government have limited discretion over utilization of majority of its funding. Based on the study findings, several recommendations were made which include among the following; Rukungiri District should step up revenue generation projects like market, promote tourism by construction of lodes and hotels, nd fight corruption among others.