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The effects of personal income tax reform on employees' taxable income in Uganda

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  • Maria Jouste
  • Tina Kaidu Barugahara
  • Joseph Okello Ayo
  • Jukka Pirttilä
  • Pia Rattenhuber

Abstract

We evaluate a major personal income tax reform in Uganda that came into effect in 2012-13. The reform increased the tax-free lower threshold, increased tax rates for higher incomes, and introduced an additional highest tax band. Using the universe of pay-as-you-earn administrative data submitted by employers in the formal sector, we analyse the impact on taxable income of the introduction of the additional top tax band. Our results indicate that the elasticity of taxable income in Uganda is larger than in previous results from developed countries.

Suggested Citation

  • Maria Jouste & Tina Kaidu Barugahara & Joseph Okello Ayo & Jukka Pirttilä & Pia Rattenhuber, 2021. "The effects of personal income tax reform on employees' taxable income in Uganda," WIDER Working Paper Series wp-2021-11, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2021-11
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    References listed on IDEAS

    as
    1. Dina Pomeranz & José Vila-Belda, 2019. "Taking State-Capacity Research to the Field: Insights from Collaborations with Tax Authorities," Annual Review of Economics, Annual Reviews, vol. 11(1), pages 755-781, August.
    2. Johannes Hermanus Kemp, 2019. "The Elasticity of Taxable Income: The Case of South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 87(4), pages 417-449, December.
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    Cited by:

    1. Kwabena Adu-Ababio & Aliisa Koivisto & Andreya Kumwenda & Gregory Chileshe & John Mulenga & Mutemwa Mebelo & Ian Mufana & Yenda Shamabobo, 2023. "Assessing the impact of an intervention to withhold value-added tax in Zambia," WIDER Working Paper Series wp-2023-21, World Institute for Development Economic Research (UNU-WIDER).
    2. Kyle McNabb & Hazel Granger, 2023. "The taxation of employment income in African countries: Findings from a new dataset," Journal of International Development, John Wiley & Sons, Ltd., vol. 35(7), pages 1595-1618, October.

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