The World Bank has raised concerns over Uganda’s tax system, warning that it remains “on the back foot” as a result of the country’s vast informal sector. According to the Bank’s latest analysis, a large share of Uganda’s economic activity particularly from small and unregistered businesses operates outside the formal tax framework, significantly limiting government revenue collection.
The report cautions that this gap hampers Uganda’s ability to adequately finance essential public services and infrastructure development. It calls for urgent reforms to broaden the tax base, encouraging the formalization of informal enterprises and the creation of a fairer, more inclusive taxation system that captures revenue from all sectors of the economy.
