IDEAS home Printed from https://ideas.repec.org/p/ags/eprcrs/280622.html
   My bibliography  Save this paper

The Value Added Tax (VAT) analysis for Uganda

Author

Listed:
  • Lakuma, Corti Paul
  • Sserunjogi, Brian

Abstract

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 high middle income country status as envisioned in the Vision 2040. Consequently, Uganda’s stock of public debt, both domestic and external, to finance the NDP has increased significantly. This has been exacerbated by significant reduction in aid due to austerity measure taken to contain the impact of the 2009 international financial crisis that constrained fiscal space significantly. In this regard, Uganda has made commitments to step up its efforts to mobilise domestic resources to finance the NDP. Owing to its efficiency and effectiveness, the Value Added Tax (VAT) has been identified as one of the key tax head that could boost domestic resource mobilisation. However, the revenue productivity of Uganda’s VAT, as measured by its “C-efficiency”, is low when compared with other Sub-Saharan African countries. It is on this backdrop that this paper provides a comprehensive quantitative analysis of the gap between potential revenues and actual VAT collections, known as the compliance gap. This analysis generates evidence for Uganda Revenue Authority (URA) to monitor and identify what is contributing to its VAT gap. In addition, this paper estimates the policy gap. The policy gap refers to the impact on the potential yield of the tax due to exemptions, zero ratings, and other reductions to the potential tax base.

Suggested Citation

  • Lakuma, Corti Paul & Sserunjogi, Brian, 2018. "The Value Added Tax (VAT) analysis for Uganda," Research Series 280622, Economic Policy Research Centre (EPRC).
    • Handle: RePEc:ags:eprcrs:280622
    DOI: 10.22004/ag.econ.280622
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/280622/files/145_Value_Added_Tax_Analysis_Uganda.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.280622?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Kasirye, Ibrahim, 2013. "Constraints to Agricultural Technology Adoption in Uganda: Evidence from the 2005/06-2009/10 Uganda National Panel Survey," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 8(2), pages 1-18, August.
    2. Ahaibwe, Gemma & Kasirye, Ibrahim, 2013. "HIV/AIDS Prevention Interventions in Uganda: A Policy Simulation," Research Series 159675, Economic Policy Research Centre (EPRC).
    3. Ruud de Mooij & Michael Keen, 2012. ""Fiscal Devaluation" and Fiscal Consolidation: The VAT in Troubled Times," NBER Chapters, in: Fiscal Policy after the Financial Crisis, pages 443-485, National Bureau of Economic Research, Inc.
    4. Christian, Michelle & Mwaura, Francis, 2013. "Economic and Social Upgrading in Tourism Global Production Networks: Findings from Uganda," Research Series 159670, Economic Policy Research Centre (EPRC).
    5. Bategeka, Lawrence & Kiiza, Julius & Kasirye, Ibrahim, 2013. "Institutional Constraints to Agriculture Development in Uganda," Research Series 159668, Economic Policy Research Centre (EPRC).
    6. Joseph, Mawejje & Lawrence, Bategeka, 2013. "Accelerating Growth and Maintaining Intergenerational Equity Using Oil Resources in Uganda," Research Series 167526, Economic Policy Research Centre (EPRC).
    7. Adong, Annet & Mwaura, Francis & Okoboi, Geofrey, 2012. "What factors determine membership to farmer groups in Uganda? Evidence from the Uganda Census of Agriculture 2008/9," Research Series 148950, Economic Policy Research Centre (EPRC).
    8. Ahaibwe, Gemma & Mbowa, Swaibu & Lwanga, Musa Mayanja, 2013. "Youth Engagement in Agriculture in Uganda: Challenges and Prospects," Research Series 159673, Economic Policy Research Centre (EPRC).
    9. Munyambonera, Ezra & Nampewo, Dorothy & Adong, Annet & Lwanga, Musa, 2012. "Access and Use of Credit in Uganda: Unlocking the Dilemma of Financing Small Holder Farmers," Policy Briefs 150229, Economic Policy Research Centre (EPRC).
    10. Shinyekwa, Isaac & Othieno, Lawrence, 2013. "Comparing the Performance of Uganda’s Intra-East African Community Trade and Other Trading Blocs: A Gravity Model Analysis," Research Series 150227, Economic Policy Research Centre (EPRC).
    11. Ezra, Munyambonera & Annet, Adong & Musa Mayanja, Lwanga, 2013. "Access and Use of Credit in Uganda: Unlocking the Dilemma of Financing Small Holder Farmers," Research Series 184167, Economic Policy Research Centre (EPRC).
    12. Mayanja Lwanga, Musa & Lakuma, Corti Paul & Sserunjogi, Brian & Shinyekwa, Isaac, 2018. "Boosting Domestic Revenue Mobilization in Uganda," Research Series 273653, Economic Policy Research Centre (EPRC).
    13. Shinyekwa, Isaac & Mawejje, Joseph, 2013. "Macroeconomic and Sectoral Effects of the EAC Regional Integration on Uganda: A Recursive Computable General Equilibrium Analysis," Research Series 159672, Economic Policy Research Centre (EPRC).
    14. Shinyekwa, Isaac & Lawrence, Othieno, 2013. "Comparing the Performance of Uganda’s Intra-East African Community Trade and Other Trading Blocs: A Gravity Model Analysis," Research Series 159667, Economic Policy Research Centre (EPRC).
    15. Shinyekwa, Isaac, 2013. "Economic and Social Upgrading in the Mobile Telecommunications Industry: The Case MTN Uganda," Research Series 159671, Economic Policy Research Centre (EPRC).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mohammed Muneerali Thottoli & Noof Amur Rashid Al Mamari, 2022. "Determinants of Value Added Tax in Oman," Journal of Tax Reform, Graduate School of Economics and Management, Ural Federal University, vol. 8(2), pages 157-169.
    2. Christou Anna & Eriotis Nikolaos & Lomis Ioannis & Papadakis Spyros & Thalassinos Eleftherios, 2021. "The Greek VAT Gap: The Influence of Individual Economic Sectors," European Research Studies Journal, European Research Studies Journal, vol. 0(4B), pages 851-882.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ahaibwe, Gemma & Mbowa, Swaibu & Lwanga, Musa Mayanja, 2013. "Youth Engagement in Agriculture in Uganda: Challenges and Prospects," Research Series 159673, Economic Policy Research Centre (EPRC).
    2. Shinyekwa, Isaac, 2013. "Economic and Social Upgrading in the Mobile Telecommunications Industry: The Case MTN Uganda," Research Series 159671, Economic Policy Research Centre (EPRC).
    3. Bategeka, Lawrence & Kiiza, Julius & Kasirye, Ibrahim, 2013. "Institutional Constraints to Agriculture Development in Uganda," Research Series 159668, Economic Policy Research Centre (EPRC).
    4. Fassil Eshetu & Degye Goshu, 2019. "Determinants of Ethiopian Coffee Exports to its Major Trade Partners: A Dynamic Gravity Model Approach," Journal of Asian Business Strategy, Asian Economic and Social Society, vol. 9(2), pages 110-119, December.
    5. Fassil Eshetu & Degye Goshu, 2021. "Determinants of Ethiopian Coffee Exports to Its Major Trade Partners: A Dynamic Gravity Model Approach," Foreign Trade Review, , vol. 56(2), pages 185-196, May.
    6. Raile Eric D. & Young Linda M. & Kirinya Julian & Bonabana-Wabbi Jackline & Raile Amber N. W., 2021. "Building Public Will for Climate-Smart Agriculture in Uganda: Prescriptions for Industry and Policy," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 19(1), pages 39-50, May.
    7. Ariho Alex & Makindara Jeremia & Tumwesigye George & Sikira Anna, 2016. "Assessment of Existing Policy and Legal Framework for Banana Value Chain Development in Uganda," International Journal of Asian Social Science, Asian Economic and Social Society, vol. 6(2), pages 146-165, February.
    8. Ellinor Isgren & Barry Ness, 2017. "Agroecology to Promote Just Sustainability Transitions: Analysis of a Civil Society Network in the Rwenzori Region, Western Uganda," Sustainability, MDPI, vol. 9(8), pages 1-20, August.
    9. Cosmas S. Mbogela, 2018. "Determinants of Africa - BRIC Countries Bilateral Trade Flows," Economy, Asian Online Journal Publishing Group, vol. 5(1), pages 40-53.
    10. European Commission, 2013. "Tax reforms in EU Member States - Tax policy challenges for economic growth and fiscal sustainability – 2013 Report," Taxation Papers 38, Directorate General Taxation and Customs Union, European Commission.
    11. Mkandawire, Dingase & Gbegbelegbe, Sika Dofonsou & Yami, Mastewal & Nsenga, Justus & Kenamu, Edwin & Manyong, Victor & Abdoulaye, Tahirou & Alene, Arega & Bamba, Zoumana, 2021. "Analysing Urban and Peri-Urban Youth Employment in Agribusiness in Malawi: A Mixed Methods Approach," 2021 Conference, August 17-31, 2021, Virtual 315214, International Association of Agricultural Economists.
    12. Khushbu Mishra & Abdoul G. Sam & Gracious M. Diiro & Mario J. Miranda, 2020. "Gender and the dynamics of technology adoption: Empirical evidence from a household‐level panel data," Agricultural Economics, International Association of Agricultural Economists, vol. 51(6), pages 857-870, November.
    13. Michal Andrle & Shafik Hebous & Alvar Kangur & Mehdi Raissi, 2021. "Italy: toward a growth-friendly fiscal reform," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 38(1), pages 385-420, April.
    14. Kalibwani, Rebecca Mutebi & Mutenyo, John, 2016. "Technological Change in Uganda’s Agricultural Sector Between 2005-2010," African Journal of Economic Review, African Journal of Economic Review, vol. 4(1), January.
    15. Djomo Choumbou Raoul Fani & Ukpe Udeme Henrietta & Emmanuel Njock Oben & Donald Denen Dzever & Onyeje Hephzibah Obekpa & Auguste Tamba Nde & Mohamadou Sani & Mbong Grace Annih & Dontsop Nguezet Paul M, 2021. "Assessing the Performance and Participation among Young Male and Female Entrepreneurs in Agribusiness: A Case Study of the Rice and Maize Subsectors in Cameroon," Sustainability, MDPI, vol. 13(5), pages 1-19, March.
    16. A team of the Working Group on Econometric Modelling of the European System of Central Banks, 2012. "Competitiveness and external imbalances within the euro area," Occasional Paper Series 139, European Central Bank.
    17. International Monetary Fund, 2015. "Finland: Selected Issues," IMF Staff Country Reports 2015/312, International Monetary Fund.
    18. Koolwal, Gayatri B., 2021. "Improving the measurement of rural women's employment: Global momentum and survey priorities," World Development, Elsevier, vol. 147(C).
    19. Zineddine Alla, 2017. "Optimal policies in International Macroeconomics," Sciences Po publications info:hdl:2441/6kvjk9o32n8, Sciences Po.
    20. Njue, E. & Kirimi, L. & Mathenge, M., 2018. "Uptake of Crop Insurance among Smallholder Farmers: Insights from Maize Producers in Kenya," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277023, International Association of Agricultural Economists.

    More about this item

    Keywords

    Consumer/Household Economics; Productivity Analysis; Risk and Uncertainty;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:eprcrs:280622. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/eprccug.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.