Did Uganda's corporate tax incentives benefit the Ugandan economy or only the firms?

Nicholas Musoke, Tereza Palanská and Caroline Schimanski

No wp-2023-133, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: Uganda has one of the lowest corporate income tax collection rates in sub-Saharan Africa, while offering generous corporate tax incentives. It is unclear whether tax incentives achieve their objectives without primarily benefiting firms, potentially undermining domestic revenue mobilization and encouraging tax avoidance. Using Uganda's administrative tax data for 2014-21 and a new tax incentive dataset, this study shows that tax holidays and the reintroduction of investment allowances are associated with a significant increase in investment and mostly with higher workforce-related expenses.

Keywords: Corporate tax; Tax incentive; Domestic revenue mobilization; Administrative data; Tax data; Developing countries; Tax avoidance (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-acc and nep-pub
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