The International Monetary Fund (IMF) has suggested that tax changes should be put through in Uganda to deal with the problems with government finances. The tax base has to be broadened to counteract the effect of the large shortfall in tax revenue and the possible reduction of foreign aid received by the country. In addition to a broader tax base Uganda needs to increase the efficiency of the tax administration.
The IMF considers that reforms in Uganda should involve an overhaul of the tax system to scrap tax relief that does not help to boost production and thereby collect more tax. The tax take in 2012 was only 12 percent of GDP and this was below the ratio for the other countries that belong to the East African Community.
