This paper examines the prevalence of tax exemptions and evasion among businesses in Uganda, how they translate into actual tax burdens for firms of different sizes, and how the tax administration attempts to ensure compliance. Despite tax reforms undertaken in 1995-97 to increase the efficiency and equity of the tax system and its administration, exemptions and evasion during this 3-year period remained widespread, and the dispersion of the tax burden did not decrease. The analysis shows that tax evasion is more prevalent among smaller firms, that tax exemptions are more common among larger firms, and that medium-sized firms tend to shoulder a disproportionate share of the total tax burden.

Shifting Tax BurdensTax burdens vary for firms of different sizes due to their through Exemptions variable tendency to seek and Evasion exemptions or evade taxes.