Tax Reform in Uganda: Missed Opportunities and Prospects for State-Building

Abstract

Over the past 26 years, Uganda has carried out a series of economic and governance reforms. Throughout the 1990s, Uganda implemented the Structural Adjustment Programmes (SAPs) sponsored by the International Monetary Fund (IMF) and world Bank aimed at transforming the economy and encouraging economic development. The economic reforms were part of a wider reconstruction programme aimed at reviving the economy after decades of economic and political mismanagement. The reforms involved liberalising the economy to stimulate the private sector and make it the engine of economic growth. These economic reforms were implemented alongside extensive governance reforms aimed at strengthening state institutions, establishing accountability through anti-corruption institutions, promoting democracy and good governance through electoral reforms among others. Despite the timing of the economic and governance reforms, they were not linked or synchronised and each aspect was pursued independently of the wider reforms. In some instance like the creation of the URA and the tax reforms, there was a deliberate effort to shield the URA from the “political” institutions themselves. The argument in this paper is that this “blunted” and constrained the impact and success of the reforms both economic and political.