Business & Management
Study Reveals Taxation Issues in Uganda’s Informal Economy
A recent study by researchers at Makerere University’s College of Business and Management Sciences has identified the lack of a structured taxation framework for informal businesses as a significant cause of tax non-compliance among traders in Uganda. This revelation came from a collaborative research project involving eight university scholars, who examined the underlying factors contributing to the shadow economy and its implications for the national tax system.
The findings were presented by Dr. Ismail Kintu, the study’s Principal Investigator, at a dissemination workshop held in Nansana Municipality Council, Wakiso District, on Thursday. The research, initiated in 2022, aimed to assess traders’ perceptions of fairness within the taxation system and how this relates to voluntary tax compliance.
“Traders said the system is unfair to them,” Dr. Kintu explained during the workshop. “Our research aimed to understand what fairness means in Uganda’s context.” According to the study, fairness in the tax system is crucial for voluntary compliance, suggesting that taxes should be aligned with one’s revenue, and penalties should be applied equitably.
The researchers developed a proposed framework for taxing the informal economy, emphasizing the importance of consulting key stakeholders, such as district commercial officers, tax consultants, and leaders from traders’ associations, before implementing tax policies. The framework recommends engaging these stakeholders in meetings with the Uganda Revenue Authority (URA) and the Ministry of Finance to ensure that new tax policies are inclusive and fair.
The study also suggests the need for flexibility in tax collection, advocating for payment in installments and prior notification to traders before collecting taxes. This approach, the researchers argue, would help build trust and encourage compliance among informal traders.
The researchers’ proposed framework includes annual mapping of policy gaps in the informal economy and developing solutions to address them. This process would involve regular consultations with stakeholders to refine the tax system and maintain fairness.
Local officials who attended the workshop expressed support for the research findings. Mr. Festo Tandeka, Nansana Municipality town clerk, encouraged traders to cultivate a culture of paying taxes but cautioned against excessive taxation. He recommended allowing tax payments in installments to avoid overburdening traders.
Similarly, Mr. Shaffic Ali Nsubuga, Nansana Municipality Deputy Resident District Commissioner, urged tax officers to approach tax collection with compassion, suggesting that prior notices be given to traders before taxes are collected.
The findings of the Makerere University study arrive at a critical time, as Ugandan traders have recently protested against increasing taxes. Mr. Joshua Mawerere, a youth representative from the Kampala City Traders Association, welcomed the study, noting that it brings clarity to issues surrounding tax policies. He urged the government to raise awareness about new tax systems, like the Electronic Fiscal Receipting and Invoicing Solution (EFRIS), which some traders mistakenly perceive as additional taxes.
The study’s comprehensive approach to understanding the informal economy’s taxation challenges may pave the way for a more inclusive and equitable tax system in Uganda, fostering greater compliance and reducing the size of the shadow economy.
The research was funded by the government of Uganda through the Makerere University Research and Innovations Fund (Mak-RIF). Speaking at the stakeholders’ engagement on April 25th, Ms Evelyn Nyacho who represented the chair of the grants committee, congratulated Dr. Kintu and team upon the timely research finding. She said the findings would help URA and the traders coming after a traders’ strike over taxation. She said Mak-RIF was happy to sponsor research that is aimed at solving society issues like taxation. “I was happy to learn that taxes can be pay in installments. I hope traders can embrace this flexibility in paying taxes,” she said. She appreciated government for the research funding to the university. The government commits Shs30 billion annually to research at Makerere University in an effort to spur development of the country.
The research team
Dr Kintu (PI), Prof Eria Hisali (Co. PI), Dr Fred Bateganya, Dr Willy Kagarura, Mr Patrick Lumala, Mr Nicholas Musoke, Ms Marion Atukunda, and Ms Winfred Nalwoga.
Over 35 public officials from various Ministries, Departments and Agencies (MDAs) have commenced a two-week intensive training in Financial Appraisal and Risk Analysis in Mbarara. The training is organized by the Public Investment Management (PIM) Centre of Excellence at Makerere University, in collaboration with the Ministry of Finance, Planning and Economic Development (MoFPED), the National Planning Authority (NPA), and Cambridge Resources International (CRI).
Speaking on behalf of the Permanent Secretary and Secretary to the Treasury, Ms. Esther Ayebare commended the ongoing efforts to strengthen Uganda’s public investment management systems. She highlighted the recent launch of the National Public Investment Management Policy, describing it as a robust and unified framework guiding the entire investment cycle—from planning and appraisal through to implementation and post-evaluation.
Ms. Ayebare further noted other key reforms including the Framework for Tracking Implementation and Performance of Public Investments, the revised Development Committee Guidelines, and the Integrated Bank of Projects, all of which are designed to improve efficiency, accountability, and value-for-money in public investments.
“Each of these reforms plays a key role in enhancing public investment management. I urge you to familiarize yourselves with them and integrate these frameworks into your daily work,” she added.
The Deputy Director of the PIM Centre of Excellence, Prof. Eria Hisali, encouraged participants to actively engage throughout the training and make the most of the opportunity to build their analytical and decision-making capacity. He commended the Ministry of Finance for its continued financial support to the Centre and reaffirmed Makerere University’s commitment to providing high-quality training and research to strengthen public investment governance.
The Manager of the PIM Centre, Dr. John Sseruyange, underscored the importance of the training, emphasizing that the PIM Centre was established to build national capacity in the appraisal, management, and evaluation of public investments. He called on participants to apply the knowledge gained to improve project preparation and implementation within their respective institutions.
Dr. Sseruyange also expressed appreciation to the team of facilitators drawn from Makerere University, MoFPED, NPA, and CRI for their expertise and continued dedication to building Uganda’s human capital for effective public investment management.
The Financial Appraisal and Risk Analysis course is part of a broader capacity-building programme implemented by the PIM Centre aimed at enhancing the skills of public officials in the design, evaluation, and monitoring of development projects to ensure that public investments deliver optimal socio-economic returns for the country.
Business & Management
PIM Centre Holds 9th Steering Committee Meeting, Set to Benefit from World Bank Support
The Public Investment Management (PIM) Centre of Excellence at Makerere University today, October 10th, 2025, held its 9th Steering Committee Meeting to review progress made in the first quarter of the financial year and plan for the months ahead.
The meeting was chaired by Ms. Getrude Basiima, who represented Mr. Hannington Ashaba, Director Budget at the Ministry of Finance, Planning and Economic Development (MoFPED). Ms. Basiima commended the Centre for its continued commitment to strengthening public investment management capacity across government institutions.
In her remarks, Ms. Basiima applauded the Centre for successfully hosting the Public Investment Management Conference held in August at Makerere University. The conference attracted key policymakers, development partners, and academics who deliberated on how to enhance the efficiency, sustainability, and impact of public investments in Uganda.
She further shared exciting news that the Government of Uganda has secured funding from the World Bank to support the public investment management function. The PIM Centre, she announced, will be among the key beneficiaries of these funds — receiving support for the construction and acquisition of a permanent home to enhance its institutional sustainability and training capacity.
Reviewing the Centre’s quarterly performance, Ms. Basiima congratulated the team for successfully conducting three specialized trainings in the first quarter, reaching officials from various Ministries, Departments, and Agencies. These trainings continue to strengthen the technical competencies required for effective project preparation, appraisal, and implementation in line with Uganda’s National Development Plan.
She encouraged the Centre to integrate climate change considerations into its future training programmes, noting that sustainable public investment must now account for environmental resilience and climate adaptation.
The centre team presented the proposed structure/ organogram, the financial performance of 2024/2025, research areas for 2025/2026 and the strategic plan for 2025 – 2030.
The Steering Committee reaffirmed its commitment to supporting the PIM Centre’s vision of becoming a regional leader in building capacity for efficient, transparent, and sustainable public investment management.
-
General1 week agoCall for Applications: Government Sponsorship 2026/27
-
General4 days agoMakerere is No.1 in the Region – THE University Rankings
-
General2 weeks agoVice Chancellor Updates Media on DVC AA Appointment, Acquisitions, Research & Various Issues
-
General2 weeks agoStrengthening Collaboration between Makerere University and the University of Groningen
-
General2 weeks agoMakerere and Nelson Mandela University Move to Actualize Existing MoU