Tax compliance and domestic revenue collection in Uganda: a case study of Makindye Division

Abstract

This study focused on assessing the effect of Tax Compliance and Domestic Revenue Collection in Uganda. A case study of Makindye Division. The objectives of the study include: to establish the level of tax compliance among Ugandan taxpayers, to access the performance of domestic revenue collection in Uganda. The findings of the study revealed that there is a strong positive relationship between Tax Compliance and Domestic Revenue Collection. Data was collected using self-administered questionnaires. The study used stratified and purposive sampling techniques to draw representative samples and 70 respondents were involved in the study. The study undertook to find out the level of tax compliance and it was found out that compliance is still low among the taxpayers and they attribute this to the low tax morale, low tax education, and tax administration which encourages tax evasion. The low level of tax compliance was also attributed to the low compliance culture. The study also found out that the cost of revenue collection is low, Large Taxpayer’s Office increased domestic revenue collection, and URA experiences and registers tax arrears that also affects its performance. The study also recommends the following; tax administration so as to provide individuals and groups with guidance on how to improve bookkeeping standards and tax returns, tax counseling offices should be established country wide, procedures for filing returns and applications. Tax education to create awareness among taxpayers, and awarding of prizes to compliant taxpayers.