Improve business climate to ensure tax compliance
Uganda has recorded impressive economic growth rates over the last two decades. However, over the same time periods, the tax effort measured by the tax-to-GDP ratio has stagnated at between 10-13 percent. One of the factors that could explain the stagnated revenue performance is tax evasion. Other factors are related to corruption and inefficient service delivery. As a result, Uganda has continued to struggle with inadequate funds to finance its budget. Recently donors, who contributed as much as 25% of the budget, unanimously decided to withhold their support due to allegations of corruption in various government departments. This has affected the performance of the Ugandan economy, with major implications on service delivery and business growth. In response, the Uganda Revenue Authority (URA) has had its tax collection targets elevated to close the financing deficit. However, the biggest challenge remains ensuring tax compliance, especially considering the size of the