TAX REFORMS AND DOMESTIC REVENUE MOBILIZATION IN UGANDA .
TAX REFORMS AND DOMESTIC REVENUE MOBILIZATION IN UGANDAREVENUE AUTHORITY A CASE STUDY OF UGANDA REVENUE AUTHORITYENTEBBEBYALI RONALD07/U/4694/EXTSUPERVISED BYMR. TURYAKIRA NAZARIUSA RESEARCH REPORT SUBMITTED TO MAKERERE UNIVERSITYIN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARDOF BACHELORS OF COMMERCE DEGREEJULY 2011A
DECLARATIONI Ali Ronald, declare that this dissertation is my own piece of work which has never beensubmitted for any award of degree in any university or higher institution of learning.Acknowledgement has been made where some other works were quoted and referred to.Signed Date ALI RONALD07/4694/EXTi
APPROVALThis research report has been carried by the student and submitted for examination with myapproval as the candidate’s University Supervisor.Signature Date MR. TURYAKIRA NAZARIUSSupervisorii
DEDICATIONThis research report is dedicated to the following people, my parents Mr. and Mrs. KerfuaSaverio, my beloved wife Aweko Grace and sister Atungonza Lillian for their love andfinancial support towards my studies.I also dedicate it to my lovely children Patience and Elisha for having been without myparental love and care during the four years of my studies.My thoughts and prayers go to my late uncle Anyiri Victorio whose kindly love towards mewas immeasurable and has always inspired me. May his soul rest in peaceiii
ACKNOWLEDGEMENTSMy sincere thanks go to all those who helped me financially, morally, materially, spirituallyand to the wise personalities who gave me their words of wisdom.Special thanks go to my wife Aweko Grace and my sister Atugonza Lillian for their love andfinancial support during the hard economic period in the course of my studies, they werealways there for me.This research report would not have been a success without the guidance and support of mysupervisor Mr. Turyakira Nazarius for the intellectual criticisms and advice that helped inshaping the general structure of this research report.Thanks also go to Mr. and Mrs. Otuko J Bosco who supported my family during hard timesin the course of my studies. To my brothers Walter, Deogracius and sisters Harriet, Justinebig thanks for their love.I recognize my friends in the discussion group John, Annet, Margret , Alex, Dorcas, Peace,Ann, Robert, Olivia, Lona, Osteen, Esther, Paul, and Joseph for their positive ideas andcooperation given to me throughout the course.Thanks also go to the following persons Dr. Odongo Charles, Mr. Opio Felix, Mr. OkelloRonald and Mr. Ocaka Bob who have been of great assistance to me in several ways.Finally am extremely grateful to all respondents who positively provided me with relevantdata as well as Makerere University providing the study requirements and those notmentioned.Thank you so much may GOD bless you.iv
TABLE OF CONTENTSDECLARATION . iAPPROVAL . iiDEDICATION . iiiACKNOWLEDGEMENTS. ivTABLE OF CONTENTS . vLIST OF TABLES . xABBREVIATIONS . xiABSTRACT . xiiCHAPTER ONE . 11.0 Background to the study . 11.1 Statement of the problem . 21.3 Objectives of the study . 21.4 Research questions . 31.5 Scope of the study . 31.6 Significance of the study . 3CHAPTER TWO . 4LITERATURE REVIEW . 42.1 Introduction . 42.2 Tax reforms . 42.2.1 Minimum tax gap . 42.2.2 Appropriate government revenue . 42.2.3 Assessment of tax . 52.2.4 Tax administration . 5v
2.2.5 Revenue collection. 52.2.6 Objectives of taxation . 62.2.7 Tax reforms . 72.2.8 Major tax reforms in Uganda . 72.2.9 Administrative reforms . 72.2.10 Value added tax . 82.2.11 Income Tax Act 1997 . 102.2.12 Why income tax? . 102.2.13 Import duty. 112.2.14 Structure of domestic taxes . 122.3.0 Domestic revenue mobilization. 122.3.1 Importance of domestic revenue mobilization to Uganda: . 132.3.2 Challenges associated with domestic revenue mobilization . 132.3.3 Determinants of domestic revenue mobilization. . 152.3.4 Tax rate . 152.3.5 Levels of income in the country . 162.3.6 Income tax administration . 162.3.7 Administrative procedures . 172.4 Relationships between tax reforms and domestic revenue mobilization. 182.5 Conclusion . 19CHAPTER THREE. 203.1 Introduction . 203.2 Research design. 203.3 Study population . 20vi
3.4 Sampling method . 203.5 Sample size . 203.6 Data source . 203.7 Data collection methods . 213.8 Questionnaires . 213.9 Data presentation . 213.10 Data analysis . 213.11 Limitations . 21CHAPTER FOUR . 23PRESENTATION, ANALYSIS AND DISCUSSION OF RESEARCH FINDINGS . 234.0 Introduction . 234.1 Background information . 234.1.1 Gender of respondents . 234.1.2 Age bracket of the respondents. . 234.1.3 Academic qualification of respondents. . 244.1.4 Period spent working with URA. . 244.1.5. Department respondents worked in. . 254.2 Finding on tax reforms . 264.2.1 Staffs have sufficient knowledge of all major tax reforms such as vat, income tax act,abolition of export taxes, reduction of import duties, administrative structure and taxeducation. 264.2.2 Introduction of VAT is a major indirect tax reform undertaken. . 264.2.3 Abolition of export taxes is an indirect tax reform. . 274.2.4 Reduction of import duties is an indirect tax reform. . 27vii
4.2.5 Income tax act is considered as the major direct tax reform. 284.2.6 Administrative procedures are properly followed in the tax management. . 284.2.7 All tax payers are provided sufficient tax education. . 294.3 Finding on domestic revenue mobilization. 294.3.2 URA Entebbe branch collect more tax revenue from indirect form of tax than directform of tax. . 304.3.3 Collecting tax revenue from organization is easier than from individual tax payer . 304.3.4 Domestic revenue mobilization procedures are effective. . 314.3.5 Budgeted tax revenue target is always achieved. . 314.3.6 Tax rate determine the level of domestic revenue mobilization in your branch . 324.3.7 Income level of the population determine tax revenue from income tax. . 324.3.8 Tax administrative procedures determine the level of domestic revenue mobilization inyour branch. . 334.4 Finding on the relationship between tax reforms and domestic revenue mobilization . 334.4.1 Domestic revenue mobilization target is achieved due to appropriate tax reforms put inplace. . 334.4.2 The tax reform makers always determine the level of domestic tax revenue mobilizationand take corrective action. . 344.4.3 More domestic revenue can be mobilized when effective tax reforms are established. 354.4.4 Tax reforms and domestic revenue mobilization are closely linked. . 354.5 Finding on relationship between tax reforms and domestic revenue mobilization. 36CHAPTER FIVE . 37SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS . 375.0 Introduction . 37viii
5.1 Summary of findings . 375.1.1 Findings on tax reforms. . 375.1.2 Findings on domestic revenue mobilization . 375.1.3 Findings on relationship between tax reforms and domestic revenue mobilization. . 385.2 Conclusion . 385.2.1 Conclusion on tax reforms . 385.2.2 Conclusion on domestic revenue mobilization . 385.2.3 Conclusion on relationship between tax reforms and domestic revenue mobilization. . 385.3 Recommendations . 385.3.1 Recommendations on tax reforms . 385.3.2 Recommendations on domestic revenue mobilization . 395.3.3 Recommendation on the relationship between tax reforms and domestic revenuemobilization. . 395.4 areas for further research . 39REFERENCES . 40APPENDIX 1: QUESTIONNAIRE. 43APPENDIX 2: DOMESTIC REVENUE MOBILIZATION PERFROMANCE . 47APPENDIX 3 BUDGET ESTIMATES . 48ix
LIST OF TABLESTable 1 Showing gender of the respondents . 23Table 2 Showing age brackets of respondents . 23Table 3 Showing academic qualification of respondents . 24Table 4 Showing period respondents had worked with URA . 25Table 5 Showing department of respondents . 25Table 6 Showing staffs having sufficient knowledge of all major tax reforms . 26Table 7 Showing whether introduction of vat is a major indirect tax reform undertaken . 26Table 8 Showing whether abolition of export taxes is an indirect tax reform . 27Table 9 Showing whether reduction of import duties is an indirect tax reform . 27Table 10 Showing income tax act is considered as the major direct tax reform. . 28Table 11 Showing if administrative procedures are properly followed in the tax management. 28Table 12 Showing all tax payers are provided sufficient tax education. . 29Table 13 Showing if all tax revenue is collected from assessed tax payers . 29Table 14 Showing URA Entebbe branch collect more tax revenue from indirect form of taxes thandirect form of taxes . 30Table 15 Showing collecting tax revenue from organizations is easier than from individual tax payer. 30Table 16 Showing if domestic revenue mobilization procedures are effective . 31Table 17 Showing budgeted tax revenue target is always achieved. . 31Table 18 Showing tax rate determine the level of domestic revenue mobilization. . 32Table 19 Showing income level of the population determines tax revenue from income tax . 32Table 20 Showing tax administrative procedures determine the level of domestic revenue mobilization. 33Table 21 Showing whether domestic revenue mobilization target is achieved due to appropriate taxreforms put in place. . 34Table 22 Showing the tax reform makers always determine the level of domestic revenue mobilizationand take corrective action .
between tax reforms and domestic revenue mobilization. Findings on tax reforms indicated that more emphasis was put on indirect tax reform but direct tax heads was given negligible attention. Majority of tax payers do not get the sufficient tax education and this leads to non compliance on the part of tax payers. Domestic
reforms in terms of tax revenue mobilization. The rest of this paper is organized as follows. Section 2 provides a literature review on the effect of reforms on tax revenue. Section 3 provides a descriptive analysis and an econometric framework for investigating the effect of reforms on tax revenue in Senegal.
impose revenue constraints also examine the effect on tax revenue.4 1 Hatta (1977a, 1977b) are among the pioneering studies in the field of trade and domestic tax/subsidy reform policies. While the first paper considered reforms of trade policies, the second one examined reforms of domestic tax policies.
The revenue mobilization reforms are focused in three main policy and administrative reform areas: (1) transition from the Goods and Services Tax (GST) regime to a best practice . Gross Domestic Product (GDP), and tax revenues, were powerfully impacted by the decline in . (tax revenue, non-tax revenue) revenue in-flows from FY 2013 through .
the customs enforcement reforms leading to more tax collected per customer should be given more examination due to its high standard deviation. Key Words: Tax Reforms, Revenue Collection I. Introduction Tax reform is aimed at raising adequate revenues to finance public expenditures on social goods and services.
tax reforms in developing countries, both emerging and LIDCs. To do that, we used a new “narrative” database of major tax reforms implemented in 45 countries during 2000-2015 as compiled by the IMF. This database considers large tax revenue changes in the aggregate but also identifies tax
Tax Revenue Reforms and Income Distribution in Developing Countries www.cgdev.org Center for Global Development 2055 L Street NW Fifth Floor . 1 This Oxfam calculation is based on 2000–2015 trends in population growth and domestic revenue mobilization. Based on conservative GDP growth projections, Oxfam calculated two scenarios for revenue .
Failing to keep tax administration reforms sustainable: The case of Peru’s tax agency 13 . PIT personal income tax RA revenue authority SARA semi-autonomous revenue authorities . Revenue administrations play an important institutional role in collecting the domestic tax
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