The effect of non-tax revenues on economic growth. A time series evidence from Uganda

Abstract

The Ugandan central government expenditure is largely composed of recurrent spending which reduces growth according to economic theory. Thus, the results indicated that there is no significant effect of non-tax revenues on growth. The empirical findings show that grants, fees and licenses are positively related to growth. However, grants, fees and licenses are insignificant. The objective of this study is to analyze the effect of Non-tax revenue on economic growth of Uganda using time series data. To achieve this objective, the study employs secondary annual time series data for Uganda for the period 2008/2009 to 2016/2017. The data for analysis were from Bank of Uganda (BOU), Uganda Bureau of Statistics (UBOS), Uganda Revenue Authority (URA)the statistical releases/abstracts, Data were analyzed using the Ordinary Linear Regression. Results show that revenue from grants has a negative and insignificant effect on Gross Domestic Product (GDP). Revenue from fees and licenses has a positive and insignificant effect on Gross Domestic Product (GDP). Thus, the main recommendation is that, Government's accounting officers should improve in accountability, transparency and showing value for money for all government revenue collected and spent and improving economic growth in Uganda requires inclusion of non-tax revenues in the calculation of total revenues. The paper also recommends that the country employ the revenues realized judiciously on economic sectors that will better accounting and collection strategies be put in place to forestall the huge funds which are not accounted for in the non-tax revenue in Uganda.