Tax Revenue And Economic Growth In Uganda From 2002 To 2011

ABSTRACT

The purpose of the study was to establish relationship between tax revenue and economic growth in Uganda from 2002 to 2011. The specific objectives of the study were to determine the level of tax revenue in Uganda, find out the level of economic growth in Uganda and the last was to establish the relationship between tax revenue and economic growth in Uganda from 2002 to 2011. The study found out that the level of tax revenue in Uganda has been increasing over time since the coefficient on tax revenue was positive with Beta =10.23933, this significant increase is attributed to the several government policies that have made it possible to attract all forms of tax collections in Uganda. The results however indicated that the level of economic growth has been decreasing over time since the gradient of the linear regression model was negative with Beta = -0.099697, thus; the relationship was found to be insignificant. Based on the results, tax revenue was negatively correlated with real GDP growth rate (r = -0.0246) and the null hypothesis was accepted leading to a conclusion that there is no significant relationship between tax revenue and economic growth. The same results are supported by the linear regression results which also indicate that tax revenue has no significant relationship with economic growth. (F = 0.00 < than F critical 0.05, 1, 8 = 5.32 and P value = 0.946> sig = 0.05). We accept the null hypothesis at 95 percent level of confidence that there is no relationship between tax revenue and economic growth. The study recommends future research on the role of tax revenue in attracting investment in Uganda, and on the impact of Uganda Revenue Authority towards economic development. 

TABLE OF CONTENT

DECLARATION

APPROVAL ii

DEDICATION Hi

ACKNOWLEDGMENT iv

LIST OF TABLES V

LIST OF FIGURES vi

ABSTRACT Vii

ABBREVIATIONS AND ACRONYMS viii

TABLE OF CONTENT ix

CHAPTER ONE 1

1.0 Introduction 1

1.1 Background to the study 1

1.2 Statement of the Research Problem 3

1.3 Purpose of the Study 3

1.4 Specific objectives of the study 3

1.5 Hypothesis of the study 3

1.6 Significance of the study 4

1.7 Scope of the Study 4

CHAPTER TWO 5

LITERATURE REVIEW 5

2.0 Chapter Over view 5

2.1.0 Tax revenue 5

2.1.1 Inadequate tax revenue 5

2.2 Economic growth 6

2.3 Tax Revenue Performance in Uganda 7

2.4 The theoretical literature review 7

2.5 Related and other studies 8

2.5.1 Other opinions, and ideas from authors or experts 11

CHAPTER THREE 15

METHODOLOGY 15

3.0. Introduction 15

3.1 Research Design .15

3.2 Research Population 15

3.4 Sample Size 16

3.5 Sampling Procedure 16

3.6 Research Instrument 16

3.7 Data gathering 17

3.8 Data Analysis 17

CHAPTER FOUR 18

PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA IS

4.0 Chapter Over view 18

4.1 Level of Tax Revenue in Uganda from 2002 to 2011 18

4.2 Level of economic growth in Uganda between 2002 and 2011 23

4.3 Establishing the relationship between tax revenue and economic

growth in Uganda from 2002 to 2012 26

4.4 Summary of Findings 2$

CHAPTER FIVE 30

SUMMARY CONCLUSIONS AND RECOMMENDATIONS 30

5.0. Introduction 30

5.1 Summary Conclusions 30

5.1.1 Level of Tax Revenue in Uganda from 2002 to 2011 30

5. 1.2 Level of economic Growth in Uganda from 2002 to 2011 30

5.1.3 Relationship between tax revenue and economic growth 31

5.2 Recommendations 31

5.4 Suggested Areas for Further Research 32

REFERENCES 33