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

Gross turnover assessment and tax compliance in Uganda’s small businesses: a deep inquiry on the certainty of presumptive tax law

“…In pursuance of this, the legal regime on presumptive tax has been amended several times to streamline the law further, improve income tax compliance of SBs and increase tax collections from this sector (Waiswa et al, 2021). SBs are categorically said to have a poor record-keeping culture and, therefore, unable to prepare accurate and reliable books of accounts based on which their income tax liability can be computed (Waiswa et al, 2021). The tax is thus imposed on a taxpayer's annual gross turnover (sales) of between UGX 10-150m.…”

“…Despite the sector's dominance, the country still faces challenges in raising the anticipated revenue from this sector. According to Waiswa et al (2021), presumptive tax collections have contributed below 1% of the total Uganda Revenue Authority (URA) revenue in the past years. The enmeshment theory advanced by Kelly (2004) suggests that non-compliance by SBs with the income tax law may be partly due to the lack of clarity of the tax law to the SB taxpayers as to the tax base (gross turnover) on which the tax is imposed.…”

“…It was possessed with challenges of imposition of the tax on turnover, absence of policy guidelines for determination of a SB taxpayer's annual IJLMA 65,5 turnover, non-subjection of taxpayers with an annual turnover of less than UGX 10m to tax, non-allowance for deduction of expenses and losses in the computation of tax payable and other technical errors in the law. The law on presumptive tax has therefore been amended several times in 2003, 2015, 2016 and 2020 to cure gaps in the existing law, further simplify taxation for this sector, expand the tax base, improve income tax compliance and the revenue yield (Waiswa et al, 2021;URA, 2015, p. 45;Private Sector Foundation, 2009:18:80). However despite these amendments, income tax compliance of this sector remains poor.…”

“…The tax was intended to simplify the law on the taxation of this sector, which is a hard–to–tax, to enable the government to harness adequate revenue from the sector. However, since the introduction of the tax, the tax yield from this sector has remained low over the years (Waiswa et al , 2021). Although the law on presumptive tax presented a more straightforward mode of taxation for SBs compared with the defunct deposit tax system under the Income Tax Decree of 1974 (as amended), it still had limitations.…”

Performance of tax-benefit systems amid COVID-19 crises in sub-Saharan Africa: A comparative perspective

“…The latest country reports, at the time of writing, areAdu-Ababio et al (2023) for Ghana,Castelo et al (2023) for Mozambique, deMahieu et al (2023) for Rwanda,Kalikeka et al (2023) for Zambia,Leyaro et al (2023) for Tanzania,Shahir et al (2023) for Ethiopia, andWaiswa et al (2023) for Uganda.…”