Free Access | 2024-04-12

BOOSTING DOMESTIC REVENUE MOBILISATION IN UGANDA

Authors/Editors: Corti Paul Lakuma ,  Brian Sserunjogi (PhD) ,  Isaac M.B. Shinyekwa (PhD) ,  Musa Lwanga

Abstract:

Despite numerous reforms, domestic revenue mobilisation in Uganda is still below its potential. While the ratio of tax revenue to Gross Domestic Product (GDP) has improved from 11.7 percent in 1999/00 to approximately 14 percent in 2016/17, it is still below the Sub-Saharan Africa (SSA) average of approximately 16 percent. However, Uganda’s public expenditure is growing at a fast rate due to the need to finance her National Development Plan (NDP) with the goal of attaining middle income country status in the next three years. Owing to the rising public expenditure coupled with the low levels of revenue collection, Uganda’s stock of public debt, both domestic and external, has increased significantly. To curb the growth in public debt, there have been calls for increased domestic revenue mobilisation (DRM). The present study focuses on the requirements to increase DRM in Uganda. The study employed different but complementary approaches to gather the relevant data and information. First, an extensive review of the previous studies on revenue mobilisation in Uganda, as well as the relevant policy documents, was conducted. Second, consultations with relevant stakeholders from government ministries, departments and agencies (MDAs), civil society organisations (CSOs), academia and the private sector were held, and third, secondary data were analysed following the tax gap approach (which measures the difference between total taxes owed and taxes paid on time). The study findings show that despite sustained annual growth in domestic revenue collections, overall revenue mobilisation in Uganda is still below its potential. Uganda continues to lag behind her regional neighbours in terms of the tax to GDP ratio.