Building up efficient and fair tax systems – lessons from Uganda

This project analyses administrative tax data in Uganda to provide knowledge for better policy-making with respect to mobilizing public revenue for inclusive economic development.

The project conducts new, policy-relevant research based on the empirical analysis of administrative tax data in partnership with the Uganda Revenue Authority (URA). The research outputs of the programme are intended to assist policy makers as they develop and implement policy tools to improve development prospects in their country. An important additional goal of the programme is to develop institutional and individual capacity to use administrative data for ongoing economic research and policy calibration.

UNU-WIDER collaborates with the research division of the URA, where administrative data, obtained directly from URA’s e-filing systems, can be accessed for research purposes. This work was initiated first in 2018, with financial support from the Ministry for Foreign Affairs of Finland in 2018–19.

In 2022, UNU-WIDER establishes a secure research lab jointly with URA. In the secure research lab the collated, quality-assured, and anonymised administrative tax data is available for external researchers by request. Request for research proposals using the Ugandan data is also launched 2022.

This co-operation is part of the UNU-WIDER project Building up efficient and fair tax systems – lessons based on administrative tax data. In Uganda the co-operation covers also tax-benefit microsimulation work done under the SOUTHMOD project. Both projects are part of UNU-WIDER's programme on Domestic Revenue Mobilization (DRM)which is financed by the Norwegian development co-operation agency Norad.

Key questions
  • Do tax administrative reforms improve tax compliance and revenue collected from small businesses?
  • How have wage-earners and individual business owners responded to the personal income tax reform? How did this reform influence tax revenues?
  • How much taxes do domestic firms versus multinationals actually pay and can we estimate the extent of international profit shifting?
  • How do existing enforcement mechanisms, such as audits, work, and are there ways to improve their design to boost tax compliance?
  • What is the incidence of various tax and spending policies and are the distributive consequences equitable?