An assessment of presumptive tax in Uganda: Evaluating the 2020 reform and four alternative reform scenarios using UGAMOD, a tax-benefit microsimulation model for Uganda

Ronald Waiswa, Jesse Lastunen, Gemma Wright, Michael Noble, Joseph Okello Ayo, Milly Isingoma Nalukwago, Tina Kaidu Barugahara, Susan Kavuma, Isaac Arinaitwe, Martin Mwesigye, Wilson Asiimwe and Pia Rattenhuber

No wp-2021-163, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: Presumptive tax, a final tax on business income, was introduced in Uganda in 1997. The latest reform to the regime in July 2020 sought to make the system more progressive, simpler, and fairer to small firms. In this work, we evaluate the reform, focusing on its revenue implications based on simulations using UGAMOD, a tax-benefit microsimulation model for Uganda. Our findings suggest that, assuming full compliance, the reform reduces tax revenue potential by between 48-72 per cent from the previous rules.

Keywords: presumptive tax; Tax administration; Small business; Tax compliance; Impact evaluation; Microsimulation modelling (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-acc, nep-afr, nep-pbe and nep-pub
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Persistent link: https://EconPapers.repec.org/RePEc:unu:wpaper:wp-2021-163

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