Ugandans concerned over taxation disparities

Ugandans concerned over taxation disparities
URA headquarters in Nakawa.

In Uganda, a growing number of taxpayers are voicing concerns over perceived inequalities in the tax system, as evidenced by a recent Afro Barometer survey and official government data.

According to the Afro Barometer report, Ugandans are increasingly questioning the legitimacy and fairness of taxation.

While 61% acknowledge the government's right to impose taxes, support has dwindled by 23 percentage points since 2017.

Moreover, two-thirds of respondents believe that ordinary citizens bear an unfair burden of taxation compared to the wealthy, revealing a sentiment of inequity in the system.

The decline in trust towards tax authorities is evident, with 56% of Ugandans expressing skepticism about the integrity of tax officials.

This lack of trust is further exacerbated by the difficulty citizens face in accessing tax information, with 76% reporting challenges in understanding their tax obligations.

Furthermore, there is a prevailing skepticism regarding the government's accountability in utilizing tax revenues for the welfare of its citizens.

Less than half of Ugandans believe that tax revenues are effectively utilized, highlighting the need for greater transparency and oversight in fiscal management.

The dwindling number of large taxpayers also raises eyebrows, as data from the government indicates a decline in the number of individuals and entities paying significant amounts of tax.

For instance, taxpayers in the bracket above shs100 billion  have decreased from 146 in the financial year 2019/2020 to a mere 74 in 2022/2023, signaling a potential shift in tax contributions.

The sentiment of tax avoidance is also on the rise, with 35% of citizens reporting widespread evasion, marking a 14-percentage-point increase since 2012.

In light of these findings, there is a call for reform in Uganda's tax system to address disparities, improve transparency, and restore public trust.

With a majority of citizens advocating for greater parliamentary oversight and fairness in taxation, policymakers face mounting pressure to enact reforms that promote equity and accountability.

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