Problems faced by the Tax authority in Uganda (LDC’s)
- It is difficult to determine the taxable capacity for the tax It is difficult to determine how much tax is to be paid by each tax payer and yet remain with enough disposable income which is enough to enable him/her to enjoy the desired standards of living.
- Narrow tax base due to high spread of poverty. This hinders the government plans of raising enough tax revenue to finance its recurrent and development
- Inadequate skilled and well trained manpower in the field of taxation. Some tax officials are incompetent and therefore they cannot effectively assess and administer
- High degree of tax evasion and avoidance by tax payers. This is due to the loopholes within the tax system which enables the tax payers to dodge paying taxes. This greatly reduces the government tax
- High levels of inflation in the country. This reduces the real value of nominal tax revenue which makes government planning and budgeting very
- High degree of corruption, embezzlement and nepotism in tax assessment and collection by tax officers. Many tax officials are corrupt and this makes the government to lose a lot of revenue which is much needed for developmental purposes.
- Inadequate facilities such as computers and other materials required for tax collection and administration. This makes the tax assessment process very difficult.
- High degree of illiteracy among the taxpayers. The majority of the population is not sensitized about the importance of paying taxes. In addition some taxes are difficult to understand by different tax payers. This leads to high costs of tax education.
- Poor social and economic infrastructure. Most of the rural areas are remote and therefore, they are difficult to reach. This increases the costs of collecting taxes.
- Political instabilities and insecurity. Many potential investors are scared and this greatly reduces the tax base hence limited government tax revenue.
- Most tax payers are scattered most especially in rural areas. This leads to low tax compliance and it increases the collection costs hence low tax revenue.
CATEGORIES Economics
TAGS Dr. Bbosa Science
