Taxpayer response to greater progressivity Evidence from personal income tax reform in Uganda

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dc.contributor.authorJouste, Maria
dc.contributor.authorBarugahara, Tina Kaidu
dc.contributor.authorAyo, Joseph Okello
dc.contributor.authorPirttilä, Jukka
dc.contributor.authorRattenhuber, Pia
dc.date.accessioned2025-04-15T16:15:44Z
dc.date.available2025-04-15T16:15:44Z
dc.date.issued2023-06-22
dc.description.abstractWe evaluate a major personal income tax reform in Uganda that came into effect in 2012–13, contributing to the scarce literature on the effects of personal income tax reform on employees’ income in a low-income country in Africa. The reform increased the tax-free lower threshold, increased tax rates for higher incomes, and introduced an additional highest tax band for top 1% of income earners. Using the universe of pay-as-you-earn (PAYE) administrative data from the Uganda Tax Authority, we analyse the impact of the reform on reported labour incomes. In the preferred specification, we find very limited support for behavioural reactions. However,heterogeneity analysis reveals that top-income workers in firms handled by ordinary (as opposed to medium or large taxpayer) offices report lower incomes after the reform. We also find suggestive evidence that part of the response may arise from income shifting. The reform managed to raise more revenue and it also led to a limited reduction in after-tax income inequality.
dc.identifier.citationJouste, M., Barugahara, T. K., Ayo, J. O., Pirttilä, J., & Rattenhuber, P. (2023, June). Taxpayer response to greater progressivity.
dc.identifier.otherhttps://doi.org/10.35188/UNU-WIDER/2021/945-7
dc.identifier.urihttps://nru.uncst.go.ug/handle/123456789/10741
dc.language.isoen
dc.publisherUNU-WIDER
dc.relation.ispartofseriesWIDER Working Paper 2023/66
dc.titleTaxpayer response to greater progressivity Evidence from personal income tax reform in Uganda
dc.typeWorking Paper
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