This paper examines the challenges and opportunities shaping tax administration in Uganda, a low-income country striving to expand its fiscal capacity amid rapid economic growth and persistent governance constraints. Drawing on administrative data, key informant interviews, and comparative analysis, we assess the evolution of Uganda’s revenue system from colonial legacies to post-independence reforms, focusing on the Uganda Revenue Authority (URA) as the central institutional actor.

Core functions analyzed:

We analyze core functions—taxpayer registration, compliance management, audits, and enforcement—highlighting how capacity deficits, corruption risks, and informality undermine revenue performance.

Impact of digitalization and equity concerns:

The study explores the impact of digitalization (e.g., e-tax platforms and mobile money integration) on broadening the tax base, alongside persistent equity concerns, including regressive local taxation and the limited taxation of high-wealth individuals and multinational corporations.

Political economy and decentralization:

We evaluate donor-supported reforms, political economy dynamics, and decentralization tensions that complicate harmonisation between central and local revenue collection.

Findings:

Findings underscore that while Uganda has achieved nominal revenue gains, structural bottlenecks—fragmented data systems, politicised exemptions, and weak taxpayer trust—constrain sustainable progress.

Conclusion and recommendations:

The paper concludes with policy recommendations emphasising institutional autonomy, simplified regimes for micro-enterprises, and targeted anti-corruption measures to align tax administration with Uganda’s development priorities.