In Uganda, there are two major categories of government revenue that namely tax revenue and non- tax revenue. The high level summary of each is as follows;
The Government has the following sources of revenue;
- taxes on income,
- taxes profits and capital gains,
This is revenue obtained by the government from other sources other than tax and they include;
- Fines or Penalties
- Surplus from Public Enterprises
- Grants and Gifts
- Special assessment of betterment levy. This is a kind of special charge levied on certain members of the community who are beneficiaries of certain government activities or public projects. For instance due to a public park in a locality or due to the construction of a road.
Challenges in revenue collection
- Inadequate capacity and technical skills
- Lack of Transparency in the usage of taxes
- Inadequate record keeping by the authorities.
- The weak tax-benefit linkages.
- Poverty among the taxpayers.
- Deliberate budget proposals aimed at politicking.
- The alleged Corruption
- Tax payer’s compliance
- Businesses are largely informal
- Ignorance about rights and obligations.
- Low tax base due to low economic activities.
- Exemptions granted to tax payers.
- Lack of accountability in public utilities and goods.
- FDI promotion and opting for tax incentives.