Business & Management
Mak-RIF Plugs Tax Education Gaps in Uganda’s Informal Sector
According to statistics from the Uganda Revenue Authority (URA) Annual Data Book 2018/19, at 12.44%, Uganda’s average tax to GDP ratio over the last five years is one of the lowest in the region, and far below the sub-Saharan Africa average of 16%. Simply put, the total tax collected by URA has on average over the past five years accounted for only 12.44% of the size of Uganda’s economy. Comparatively, Kenya, Tanzania, Rwanda and Burundi recorded average tax to GDP ratios of 16.10%, 12.83%, 15.80% and 13.55% respectively over the same period.
This should not come as a surprise, given that 2016 statistics from the Uganda Bureau of Statistics (UBOS) indicated that approximately 98% of Uganda’s population of working age (14-64) were engaged in the informal sector. The title of a 2017 article published by the Economic Policy Research Centre (EPRC) based on the same statistics put it aptly, “Informality Growing Faster than Formality”.
Expanding the tax base by tapping into semi-formal economic activities is going to be one of the major focus areas in the Third National Development Plan (NDPIII) 2020/21-2024/25. It is against this background that researchers in the College of Business and Management Sciences (CoBAMS) led by the Principal, Dr. Eria Hisali conducted a study that sought to understand which gaps exist in tax education and how these gaps can be packaged into improving compliance and subsequently broadening the tax base in Uganda.
Funded by the Government of Uganda through the Makerere University Research and Innovations Fund (Mak-RIF) the research undertaken in 2020 targeted over 500 respondents with particular focus on the informal sector. In addition to the Principal Investigator (PI) Dr. Eria Hisali, the research team consisted of Dr. Ismail Kintu, Dr. Fred Bateganya, Ms. Marion Atukunda, Ms. Winfred Nalwoga, Mr. Nicholas Musoke, Mr. Patrick Lumala and Dr. Kagarura Willy.
Speaking at the research dissemination workshop held on 10th February 2021 in the School of Business Conference Room, Dr. Hisali shared that “The research advocates for a comprehensive review of Uganda Revenue Authority’s tax education programme with focus on linking tax collection to better service delivery,”
The research team’s interaction with members of the informal sector revealed that tax education being provided is not well suited to the informal sector. “For instance, tax exhibitions, messages on websites and brochures do not provide the best approach to reach out to the informal sector. The informal sector needs more engagement with emphasis on field visits and face-to-face interaction,” explained Dr. Hisali.
The Principal Investigator however pointed to some quick wins that could be adopted as URA evaluates and updates its tax education programme. He noted that approximately UGX 6 Trillion had been allocated to livelihood programmes by the Government of Uganda between the 2018/19 and current financial years. “How can tax education be included as part of the package that these Government livelihood programmes contain? I think we could see some quick wins because as recipients benefit from livelihood programmes, they could be asked to register as tax payers.”
Findings shared by the research team further revealed a limited coverage of tax education. Whereas 53% had been told or heard about the importance of paying taxes, only 40% had received education on how to register for taxes while only 38% had heard about filing tax returns. Furthermore, only 32% had received tax education on fines and penalties, 29% on the benefits of paying taxes and only 16% on audits and assessments.
Nevertheless, some of the registered respondents who admitted to not paying taxes cited low tax morale as well as poor service delivery and unfairness as reasons for their noncompliance. Researchers further took note of the limited personal touch with potential taxpayers in the informal sector, disconnect between the current taxpayer education modality and unique features of the informal sector, as well as the cost implications and overly technical language in existing modalities as some of the reasons for nonpayment of taxes.
The Study concluded that:
- Majority of the respondents had limited or no knowledge about the Tax Identification Number (TIN), a critical requirement for tax payment. More than half of respondents did not know how to acquire a TIN.
- Actors in the informal sector cannot differentiate between taxes paid to URA and those paid to local governments and other bodies that bring together operators.
- Most respondents did not know how to formalize their business/enterprise, another important factor for tax registration.
- There exists some form of registration of informal businesses/enterprises upon which formalization can build.
- The URA tax education campaigns messaging and targeting has left out some potential tax payers. Messaging and targeting of tax education is key to realizing intended results of growing the tax base and ultimately the tax revenues.
The Research Dissemination attracted participants from URA, Kampala City Traders Association (KACITA), Academia, Private Sector, Civil Society, the Media, Mak-RIF Grants Management Committee (GMC) as well as staff and students from Makerere University.
Painting a picture on the new ideas and innovations to foster a taxpaying culture through tax education, URA’s Mr. Nicholas Musoke who represented the Assistant Commissioner Research Planning and Development-Ms. Milly Nalukwago, noted that whereas Uganda’s population is approximately 45.7million, the taxpayer register stands at only 1.59million. Approximately 953,000 of those registered are active taxpayers, while 906 URA clients pay 80% of the tax. The informal sector currently contributes less than 1% (0.03%) of tax collected.
To help achieve this, URA plans to roll out the AEN strategy. AEN stands for Awareness, Empower and Nurture. Under Awareness, URA intends to intentionally engage the public on tax laws, roles, rights, obligations and opportunities relating to tax. Under Empower, URA will guide taxpayers on their rights as well as how and when to fulfil their tax obligations, while under Nurture, the Authority will set up and support mechanisms to cultivate and maintain a taxpaying culture.
Dr. John Mutenyo who represented the Chairperson of MakRIF GMC- Prof. William Bazeyo in his address commended the Government of Uganda for prioritizing research at Makerere University. “In phase One of Mak-RIF, the Government committed UGX 30billion and this was one of the research projects that
was funded under that phase. To date, over 500 competitive research grants have been supported.”
Prof. Bazeyo congratulated Dr. Hisali and the entire research team for undertaking a study geared towards strengthening the implementation of NDPIII and supporting the development of Uganda. “Most importantly, I would like to thank Dr. Hisali and the team for having a collaborative study that involved the key stakeholders such as URA. These are the stakeholders that are going to make it easy to buy into and implement the outcomes of this research.”
Commenting on the findings, the other stakeholders at the research dissemination workshop pointed out the need to embark on trust building programmes with the taxpayer. They equally emphasised the need to consider reducing the load on the tax payer. The taxpayer in Uganda is subject to taxes such as;
Value Added Tax (VAT), Pay As You Earn (PAYE), Customs, Demurrage, Income Tax, Withholding Tax, Excise Duty, Over-The-Top (OTT)/Social Media Tax among others.
Article by Public Relations Office
Business & Management
Somali Officials Complete Executive Training in Infrastructure Asset Management at CoBAMS
Six Somali government officials have successfully completed a three-day Executive Training in Infrastructure Asset Management, held at Makerere University’s Public Investment Management Centre of Excellence (PIM CoE). The training, funded by the United Nations Capital Development Fund (UNCDF), took place from January 27 to 29, 2025, and aimed to enhance regional capacity in infrastructure planning and management.
The training brought together senior civil servants and policymakers from Somalia, equipping them with practical knowledge and strategies for sustainable infrastructure asset management. It also fostered valuable cross-border collaboration, facilitated by UNCDF Uganda, which played a crucial role in connecting Makerere University with the Government of Somalia.
The program was delivered by experienced faculty from Makerere University’s College of Business and Management Sciences (CoBAMS), alongside experts from the Ministry of Finance, Planning and Economic Development (MoFPED) and the Uganda National Roads Authority (UNRA). A special session was also led by the Makerere University Bursar, offering practical insights into financial management in infrastructure projects.
Speaking at the opening of the training, Mr. Ncube Mkhululi, the Regional Technical Advisor for UNCDF emphasized the importance of infrastructure asset management in driving sustainable economic growth. He highlighted UNCDF’s commitment to supporting capacity-building initiatives in developing economies, noting that effective infrastructure planning and management are critical to national development. He also expressed confidence in Makerere University’s expertise in delivering high-impact executive training programs for government officials.
During the closing ceremony, Prof. Bbaale Edward, the Principal of the College of Business and Management Sciences expressed gratitude to all partners, including UNCDF, Makerere University management, and the PIM CoE faculty, for their commitment to making the training a success. He emphasized Makerere University’s ongoing efforts to internationalize its research-led agenda, positioning itself as a hub for regional knowledge exchange.
UNCDF Program Manager, Mr. Joel Mundua, the commended the participants for their dedication and encouraged them to share the acquired knowledge with fellow officials in Somalia. This was reaffirmed by one of the participants, who pledged to apply and disseminate the learnings within their respective departments.
Mr. Sunday Denis Aliti, the Program Officer at UNCDF highlighted the importance of ensuring that infrastructure asset management strategies are practical, adaptable, and aligned with national development goals. He commended Makerere University for its leadership in knowledge transfer and regional training and encouraged continued collaboration between universities, governments, and international development partners to strengthen institutional capacity.
Dr. John Sseruyange, Manager of the PIM CoE, applauded both the participants and the expert trainers who contributed to the program. He reiterated the Centre’s commitment to advancing infrastructure asset management through continued training and collaboration with regional stakeholders.
As the training concluded, participants departed with valuable insights and practical tools to improve infrastructure management in Somalia and beyond. The success of this initiative highlights Makerere University’s role as a leading institution in public investment management, fostering capacity-building efforts that drive sustainable development across Africa.
The Statistics and Data Science (SDS) Working Group training kicked off on Monday, 20th January 2025, and will run until 24th January 2025. This training, an initiative by the college, aims to build capacity in Artificial Intelligence (AI) and Machine Learning (ML) among its members.
Participants are being equipped with a wide range of skills, covering topics such as text mining, unsupervised learning, neural networks, Geographic Information Systems (GIS), and more. The training is facilitated by expert data scientists from the Uganda Revenue Authority (URA), Housing Finance Bank, and the School of Statistics and Planning (SSP).
The SDS Working Group comprises academic staff at the School of Statistics and Planning (SSP) whose research interests focus on statistical learning and AI.
On January 21, 2025, Mr. Kiyingi Simon Peter and Mr. Tusubira Brian from URA led an engaging session on the practical applications of machine learning algorithms in day-to-day activities. They demonstrated how components fed into ML models are used to classify taxpayers into high-risk and low-risk categories, showcasing the transformative potential of AI in optimizing operations.
Dr. Margaret Banga, the Dean of the School of Statistics and Planning (SSP), emphasized the transformative impact of the training on both the academic and professional development of the participants. She commended the expert trainers from the Uganda Revenue Authority (URA) and other partnering institutions for their practical and insightful contributions to the sessions. Dr. Banga noted that the training is a significant step toward enhancing the teaching methodologies and research capabilities of the faculty. “By equipping our staff with advanced skills in Artificial Intelligence and Machine Learning, we are empowering them to deliver cutting-edge knowledge to our students and conduct impactful research that addresses real-world challenges,” she remarked.
The training is a testament to the SSP’s forward-thinking approach to education and research in statistics and data science. The integration of topics such as neural networks, text mining, and Geographic Information Systems (GIS) underscores the need for multidisciplinary expertise in an increasingly data-driven world. Dr. Banga highlighted that this capacity-building effort aligns with the college’s strategic objectives of fostering innovation and staying ahead in the rapidly evolving fields of data science and statistical learning.
The Dean further stressed the importance of partnerships with organizations like the Uganda Revenue Authority and Housing Finance Bank, which provide invaluable industry perspectives. These collaborations ensure that academic training is not only theoretical but also applicable to practical challenges in sectors such as taxation, finance, and public administration.
In conclusion, Dr. Banga reaffirmed her commitment to continuous learning and development within the School of Statistics and Planning. She expressed confidence that the knowledge gained through the training would translate into improved academic delivery, enriched research output, and a stronger contribution to societal and economic transformation through the application of advanced data science methodologies.
On January 20, 2025, the Public Investment Management (PIM) Centre of Excellence at Makerere University commenced a three-day training program titled “Essentials of Public Investment Management.” The workshop, held at the College of Business and Management Sciences (CoBAMS), aims to enhance the capacity of public service officials in planning, executing, and evaluating public investment projects.
The training workshop was officially opened by Prof. Edward Bbaale, who, in his opening remarks, expressed gratitude to the Ministry of Finance, Planning, and Economic Development for their financial support and pivotal role in identifying and nominating participants for the program. He acknowledged the contributions of Permanent Secretaries, Vice Chancellors, and Executive Directors in ensuring representation from various Ministries, Departments, and Agencies (MDAs) of the Ugandan government.
Prof. Bbaale commended the collaborative efforts of Makerere University faculty, the Ministry of Finance, and the National Planning Authority in designing and delivering the training curriculum. He emphasized that the program reflects Makerere University’s commitment to fostering excellence in public investment management through capacity-building initiatives.
The training covers a comprehensive range of topics, including project preparation, the Integrated Bank of Projects (IBP), procurement processes, Public-Private Partnerships (PPPs), monitoring and evaluation, and the integration of climate change and social risk management in project planning. Participants will gain both theoretical knowledge and practical experience in preparing real-world projects across vital sectors such as health, education, roads, electricity, and water.
Prof. Bbaale also highlighted the importance of advancing participants’ expertise through future modules in financial and economic appraisal of projects. He encouraged participants to consider enrolling in advanced training programs offered in collaboration with Cambridge Resources International and Queen’s University, Canada. Successful completion of these advanced modules will lead to a tripartite certification from Makerere University, the Ministry of Finance, and Queen’s University.
In addition to training, the PIM Centre of Excellence engages in research, outreach, and advisory services. Prof. Bbaale outlined ongoing projects, such as revising Development Committee guidelines for the Ministry of Finance and assessing project performance since the first National Development Plan (NDP I). He noted the Centre’s recent milestone—the successful hosting of the Public Investment Management Conference in October 2024—which evaluated the state of public investments in Uganda and charted the way forward.
The program participants, drawn from various government institutions, were encouraged to leverage the training to drive positive change in their respective roles. “This marks the beginning of your journey to becoming experts in Public Investment Management. Your commitment will not only enhance public service efficiency but also contribute to Uganda’s economic transformation,” said Prof. Bbaale.
The workshop is coordinated by the PIM Centre of Excellence Secretariat under the leadership of Dr. Sseruyange. The Centre remains steadfast in its mission to build capacity, promote research, and foster innovation in public investment management. At the end of the training, participants will be awarded dual certificates from Makerere University and the Ministry of Finance, recognizing their dedication to professional development.
This initiative underscores Makerere University’s role as a key player in national capacity-building and economic development through education and innovation. For God and My Country.
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