Drawing on administrative tax records, household‐survey data, and an original review of policy documents, this paper provides a
comprehensive assessment of Uganda’s tax performance since the 1990s. Despite two decades of almost continuous
reform—including the 1997 Income Tax Act, the creation of the semi-autonomous Uganda Revenue Authority (URA), and the 2012-
13 progressive personal-income-tax overhaul—Uganda’s tax-to-GDP ratio has stagnated at ~13 %, well below the 18 % East-African
average and far short of domestic financing needs. We decompose this under-performance into three dimensions. First, tax
potential and effort: micro-simulations and C-efficiency ratios indicate that collections could rise by at least one-third without new
legislation merely by closing compliance gaps in PAYE, VAT, and corporate income tax. Second, distributional outcomes: fiscal-
incidence analysis shows that Uganda’s combined taxes and transfers reduce the Gini coefficient by only 1.2 points and leave the
poverty headcount virtually unchanged; indirect taxes and thinly-targeted subsidies render the poorest 40 % net payers into the
fiscal system. Third, political-economy constraints: qualitative evidence reveals that political interference in URA governance,
fragmented central-local administration, and weak property taxation in the informal sector blunt enforcement and erode taxpayer
trust. The 2012-13 reform offers a rare success: raising the top marginal rate from 30 % to 40 % on monthly incomes above UGX 10
million generated an extra UGX 206 billion (≈ US$57 million) annually while leaving top-earner labour-supply largely intact,
demonstrating that progressivity can be both revenue-positive and administratively feasible in low-income settings. We conclude
that Uganda epitomises the broader paradox facing poor countries: revenue potential exists, but realising it requires not only
technical fixes—digital invoicing, taxpayer segmentation, and risk-based audits—but also deeper institutional reforms that shield the
revenue authority from political capture and broaden the tax net to encompass land, property, and informal-sector incomes.