A new report has revealed that many Ugandans feel that tax evasion is a necessity if their businesses are to thrive or survive.
These findings were released by Twaweza Uganda in report titled: Money, money, money: Citizens’ views and experience of business and the tax environment in Uganda.
The findings are based on data collected from 2,900 respondents between 15 January 15 and February 7, 2022, and from 2,761 respondents in the second round, conducted between 24 April and 12 May 2022.
When it comes to tax issues, Ugandans hold mixed views
The report states that citizens pay taxes and levies with the expectation that this will help improve public services.
Others said they pay taxes because it is compulsory. According to the report, people who are relatively well off are more likely to mention service delivery as a reason they pay tax while the poor say they pay taxes because it is compulsory.
"More citizens are also likely to agree that they would pay tax without enforcement (69% in 2022, 53% in 2019). Wealthier and urban citizens are more likely to agree with both these statements than their peers," the report notes.
Violet Alinda, Country Lead for Uganda at Twaweza said some clear messages are emerging from citizens on doing business and paying tax in Uganda, adding that it is positive to see growing agreement on the important role that taxes play in the country’s development.
"At the same time, resources are the biggest challenges facing business owners, past and present. In this context of scarce capital, taxes and levies hurt even more. Given the current global livelihood challenges, to which Uganda is not immune, the government would do well to heed the cries of the productive backbone of our economy," she said.
She said the high rate of business closures is also a challenge because it means lost jobs and economic opportunities.
"We can do more to encourage positive attitudes towards tax among citizens. Those who interact with URA have had largely positive experiences. More needs to be done to create collaborative engagements between citizens and tax collectors characterised by openness and responsiveness, “she said.