The distributional impacts of fiscal consolidation in Uganda

Corti Lakuma, Joseph Mawejje, Musa Mayanja Lwanga and Ezra Munyambonera

No 275660, Research Series from Economic Policy Research Centre (EPRC)

Abstract: While Uganda is considered to be at low risk of debt distress, the stagnant tax effort and large planned capital expenditures might significantly alter this position. This paper employs the dynamic stochastic general equilibrium (DSGE) model to examine tax design issues that arise in addressing debt increases. The results suggest that Uganda may improve it debt position by permanently increasing tax rates by 5 percentage point. However, an increase of consumption tax rates (VAT and Excise) by this magnitude to meet debt reduction is found to be relatively more distortionary affecting consumption, especially for the poor households, in both the short and long run leading to large temporary reductions in the gross domestic product (GDP).

Keywords: Industrial Organization; Public Economics (search for similar items in EconPapers)
Pages: 28
Date: 2018-06-29
New Economics Papers: this item is included in nep-dge
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/275660/files/1 ... on%20in%20Uganda.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:275660

DOI: 10.22004/ag.econ.275660

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 ().