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Effects of withholding value-added tax in Uganda

Author

Listed:
  • Karri Vuoristo

Abstract

The paper examines the effects of a value-added tax (VAT) withholding regime implemented in Uganda using administrative data from the Uganda Revenue Authority. By using modern two-way fixed effects models, the research estimates the dynamic effects and finds that firms increase their reported outputs by approximately 17.8 per cent and that the estimated value added increases by around 35 per cent. The study finds no effect on reported inputs and offers suggestive evidence that the positive effect found in outputs and value added might not be persistent across time.

Suggested Citation

  • Karri Vuoristo, 2025. "Effects of withholding value-added tax in Uganda," WIDER Working Paper Series wp-2025-63, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2025-63
    as

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    File URL: https://www.wider.unu.edu/sites/default/files/Publications/Working-paper/PDF/wp2025-63-effects-withholding-VAT-Uganda.pdf
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    References listed on IDEAS

    as
    1. Adhikari, Bibek & Alm, James & Harris, Timothy F., 2021. "Small business tax compliance under third-party reporting," Journal of Public Economics, Elsevier, vol. 203(C).
    2. Michael Keen, 2009. "What Do (and Don't) We Know about the Value Added Tax? A Review of Richard M. Bird and Pierre-Pascal Gendron's The VAT in Developing and Transitional Countries," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 159-170, March.
    3. Mawejje, Joseph & Sebudde, Rachel K., 2019. "Tax revenue potential and effort: Worldwide estimates using a new dataset," Economic Analysis and Policy, Elsevier, vol. 63(C), pages 119-129.
    4. Roth, Jonathan & Sant’Anna, Pedro H.C. & Bilinski, Alyssa & Poe, John, 2023. "What’s trending in difference-in-differences? A synthesis of the recent econometrics literature," Journal of Econometrics, Elsevier, vol. 235(2), pages 2218-2244.
    Full references (including those not matched with items on IDEAS)

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