The factors influencing domestic tax evasion in Uganda. A case study of Kikuubo, Kampala

Abstract

This study seeks to investigate the factors influencing domestic tax evasion in Uganda, a case study of Kikuubo, Kampala. The research study was carried out between November 2021 to March 2022. The research design adopted was the cross-sectional design in that business owners were interviewed once since the researcher wanted data at that particular point in time, and therefore no need to perform a follow-up on the participants due to inadequate resources like time and financial resources. A questionnaire was used to collect data that was analysed at three stages: univariate, bivariate and multivariate analysis using Stata version 15.0. From the multivariate analysis, tax evasion was explained by age of the business and nationality of the business owner (with p=0.005, p=0.020 respectively). Therefore, business owners whose businesses have lasted more than ten years and are Ugandan nationals are more likely to evade taxes than those whose businesses have lasted more than 10 years and are non-Ugandan nationals. Even though there is a decrease in tax evasion in Uganda, Ugandan business owners whose businesses have lasted more than 10 years are continuously evading taxes. From this study, the research paper recommended that there should sensitization of the business owners about the significance of fully paying up taxes to the Government. Also, Ugandan business owners should be mandated by all regulatory authorities to have a trading license from the ministry of trade which subjects them to the compulsory filing of taxes.