Abstract:
Most developing countries devote their attention to designing taxation policies that promote
economic development, since taxation policy is a very important instrument for augmenting
revenue if not the primary domestic revenue source. This paper aims to evaluate Uganda’s tax
system by subjecting it to principles of a good tax system and comparison with tax
effort/performance from other sub-Saharan Africa countries. For the purpose of the study, the
criteria of determining a good tax system border on effective administration, equity and fairness,
convenience of payment, certainty, transparency and accountability, simplicity, efficiency,
neutrality and one that has a minimum tax gap. The data sources include the Uganda’s fiscal
policy environment, legal framework on taxation and tax reforms. Study found that despite
undertaking more favorable tax reforms over the last three decades, Uganda’s fiscal policy is
marked by high budget deficits, suffers substantial imbalance in the tax incidence, low impact
and limited tax base, low levels of tax compliance and high tax evasion as well as tax
avoidance. The study concluded that these characteristics of Uganda’s tax system are
synonymous with a country whose tax system falls below the criteria of a good tax system and
may therefore need continuous review
