Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/229412
Authors: 
Jouste, Maria
Barugahara, Tina Kaidu
Ayo, Joseph Okello
Pirttilä, Jukka
Rattenhuber, Pia
Year of Publication: 
2021
Series/Report no.: 
WIDER Working Paper No. 2021/11
Abstract: 
We evaluate a major personal income tax reform in Uganda that came into effect in 2012-13. The reform increased the tax-free lower threshold, increased tax rates for higher incomes, and introduced an additional highest tax band. Using the universe of pay-as-you-earn administrative data submitted by employers in the formal sector, we analyse the impact on taxable income of the introduction of the additional top tax band. Our results indicate that the elasticity of taxable income in Uganda is larger than in previous results from developed countries. Overall, the additional revenue generated from the introduction of the additional top tax band by far offset the revenues lost from the decreased revenues from employees with medium to lower taxable incomes, despite the large elasticity of taxable income at the top. We contribute to the very scarce literature on the effects of personal income tax reform on employees' income in a low-income country in Africa.
Subjects: 
personal income tax
Uganda
administrative data
tax reform
JEL: 
C31
H24
O23
Persistent Identifier of the first edition: 
ISBN: 
978-92-9256-945-7
Creative Commons License: 
https://creativecommons.org/licenses/by-nc-sa/3.0/igo/
Document Type: 
Working Paper

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