Browsing by Author "Mukisa, Ibrahim"

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    Asymmetric Analysis of the Impact of Taxation on Unemployment in Uganda
    (East African Journal of Business and Economics, 2024) Mukoki, James; Mukisa, Ibrahim; Ssebulime, Kurayish; Musoke, Edward
    Uganda, like most developing countries, has one of the highest tax rates not only in Africa but also in the world. This explains the numerous challenges faced in mobilizing sufficient revenues to fight poverty and improve people’s economic welfare. We, therefore, use a more recent nonlinear autoregressive distributed lag model (NARDL) to analyze the impact of higher taxes on the unemployment rate in Uganda. Results indicate that total Unemployment in Uganda is a negative function of both an increase in tax and a negative change in tax. Specifically, if taxes increase, then unemployment decreases by almost 3.9%, and if taxes decrease, then unemployment increases by about 4.9%. Also, the unemployment level decreased by 0.06% with a decrease in the gross capital formation (GFKF). Finally, unemployment also decreases with a rise in GDP and decreases with a decrease in GDP. In a nutshell, Uganda lacks the possibility of making the economy more productive and thus only relies on taxing an already overtaxed economy. Overtaxing an economy kills the possibility of ever building a formidable capital base that can stimulate economic growth and reduce poverty and unemployment. The government, therefore, should cut taxes and level the playing field regarding tax policies for foreign and home-grown investors. Finally, policymakers should also aim to unlock the potential of the informal sector not only to create jobs but also to widen the tax base
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    Fiscal Policy, Uncertainty and Output Growth in Uganda: 1980-2020
    (East African Journal of Business and Economics, 2023) Ssebulime, Kurayish; Mukisa, Ibrahim
    Does uncertainty necessarily change the way in which fiscal policy affects output growth in Uganda? We provide an empirical response to this fundamental question using the latest datasets and a rigorous econometric practice. Fiscal policy is often manipulated in many countries as one of the means to provide counter-cyclical stimulus over the cycle of uncertainties. Indeed, fiscal policy operations frequently vary with uncertainty sequence and this introduces bidirectional interactions between fiscal policy, uncertainty and output growth. Using the Autoregressive Distributed Lag Model, we show that tax revenue and expenditure are the most affected fiscal policy measures in the presence of uncertainty, while borrowing is the least affected both in the short and long-run. Therefore, unless government macroeconomic frameworks fully incorporate economic uncertainties into projections, the fragility of rising global and domestic uncertainty is bound to cause large and significant divergencies between the anticipated and the actual growth outturn. We therefore recommend the need to use borrowing avenue in the most optimal means to stimulate and sustain growth. While tax revenues have proved to spur growth both in the short and the long-run, the impact is bound to shrink in the face of uncertainty.
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    Sectoral Growth Patterns and Unemployment in Uganda
    (East African Journal of Business and Economics, 2023) Mukoki, James; Hisali, Eria; Mukisa, Ibrahim
    Uganda’s labour market is typically characterized by extensive productivity and earning variations with large amounts of labour trapped and toiling in low-productivity subsistence activities. A policy aimed at reallocating such underemployed labour to higher productivity activities plays a role in tackling the unemployment problem and is a top priority for policymakers. This study examines the asymmetric effects of differential sectoral growth on unemployment in Uganda, considering both the size and composition effect of sectoral growth. The results of this study indicated that a positive shock in agricultural sector value added has a positive causal effect on unemployment. Also, a positive and negative shock in the industrial sector does not affect the level of unemployment. Finally, both a positive and negative shock in the service sector value added has a negative effect on the unemployment level. Another interesting finding of this study is that both the size and composition of sectoral growth matter in addressing the unemployment problem in Uganda. Therefore, both positive and negative shocks should be forecasted and incorporated in government planning frameworks for short, medium, and long particularly during manpower planning. However, sectors with higher labour intensity should be prioritized in budgetary allocations, the government should devise means of reducing underemployment of labour trapped in low-productivity agriculture and other small-scale production activities to create meaningful employment.