A microsimulation of the Uganda tax system (UGATAX) and the poor from 1999 to 2003

Sarah N. Ssewanyana and John A. Okidi

No 54940, Research Series from Economic Policy Research Centre (EPRC)

Abstract: Like most developing countries, Uganda faces serious fiscal challenges in her effort to mobilize and effectively use resources for poverty reduction. however, the tax base remains small as reflected in the low tax-to-GDP. the government is under internal and external pressure to increase its domestic revenue collection and i turn, reduce its dependency on donors. In response to the pressure the government endeavored to maintain fiscal discipline, partly by raising taxes. the consequences of this move on the poor remains unclear. the main purpose of this paper is to throw light on the effects of alternative reforms to existing tax system on those households living in poverty. The analysis was carried out using the nationally representative Uganda national household survey of 1999/00 (UNHS I) using micro-simulation techniques. the key findings emerging from the analysis are: Increasing value added tax (VAT) other taxes unchanged will increase the tax burden of the poor but the non-poor households will continue paying more taxes relative to their expenditures that the poor households; Zero rating of the key taxable consumer items consumed by the poor would have little fiscal consequences. the amount of revenue forgone is less than the graduated tax (head tax) forgone; and the largest portion of the tax burden born by the poor households originates from VAT followed by excise duties and graduated tax.

Keywords: Consumer/Household Economics; Demand and Price Analysis; Financial Economics; Industrial Organization; Labor and Human Capital (search for similar items in EconPapers)
Pages: 31
Date: 2008-10
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://ageconsearch.umn.edu/record/54940/files/series55.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:eprcrs:54940

DOI: 10.22004/ag.econ.54940

Access Statistics for this paper

More papers in Research Series from Economic Policy Research Centre (EPRC) Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().