The Evolution of Taxation in Uganda: From Colonial Times to the URA

By Amos Ssemuwemba 

Taxation in Uganda began during the British colonial era, with the signing of the Uganda Agreement (or Buganda Agreement) in 1900. This agreement introduced formal taxes, primarily the hut tax and the gun tax. The hut tax was levied on each dwelling, encouraging the local population to engage in the cash economy, while the gun tax was imposed on firearms, serving both as a revenue source and a means of control. These taxes were initially focused on the Buganda Kingdom but later expanded across Uganda as British influence grew.

Before the establishment of the Uganda Revenue Authority (URA) in 1991, tax collection was handled by various government departments under the Ministry of Finance:

1. Department of Income Tax: Responsible for collecting direct taxes like income and corporate taxes.

2. Department of Customs and Excise: Managed customs duties on imports and exports, and excise duties on local goods.

3. Local Government Authorities: Collected property taxes, market dues, and other local levies to fund public services.

Despite these structures, the system was plagued by inefficiencies, corruption, and tax evasion, leading to poor revenue collection.

To address these issues, the Uganda Revenue Authority was established in 1991 by an Act of Parliament as a semi-autonomous body. The URA centralized and streamlined tax collection, taking over the roles of the previous departments. Its creation marked a significant improvement in tax administration, increasing efficiency, reducing corruption, and boosting government revenue.

Today, the URA continues to play a vital role in Uganda’s economic development by ensuring effective tax collection and compliance.