New Tax Proposals: Stop Squeezing the Same Orange, Find New Revenue Sources

By Jude Opolot Akol

On 23rd March 2026, we were deceived into thinking that the only thing that rises every morning in the Pearl of Africa is the sun—but alas, the taxman also woke up feeling inspired. In the headlines of the Daily Monitor was a new national philosophy embedded in the tax proposals: “If it moves, then tax it. If it doesn’t move, then tax the paperwork.”

From fuel to land, and not even sparing your favorite boda boda rider, the message is clear: economic activity has ceased to be just about survival, it is now a shared hustle between citizens and the taxman.

The Ugandan taxpayer is about to be promoted, perhaps from a survivor to a shock absorber, as these proposals suggest that Uganda has chosen to double down on indirect taxation, the art of taxing people without asking how much they earn.

Statistics from URA reveal that at least 60% of revenue comes from indirect taxes. So while authorities may not know people’s incomes, they are certain that individuals will eat, and those who move will buy fuel.

The proposals indicate an increase of UGX 200 per litre of fuel. In Uganda, this is practically a national inflation starter pack. Fuel, like salt in food, is felt by everyone – transport fares rise, food prices increase, yet salaries remain stagnant, especially in a country where less than 1% earn more than UGX 1 million.

Kampala’s lifeline of movement, the boda boda sector, may not survive these new taxes. We are now moving to tax the hustle of the youth while simultaneously questioning why they are idle. The statistics are clear: at least 1.5 million boda bodas support livelihoods. These are not luxuries; they are survival machinery for many.

Taxing them at registration and transfer is like saying, “We see your hustle, and we would love to participate financially.” For those considering entering the boda boda economy, these taxes mean a higher cost of entry, reduced income margins, and, inevitably, increased fares for customers. Once again, the burden circles back to the ordinary citizen.

But let’s take a moment to examine the bigger picture—Uganda’s tax problem. The country’s tax-to-GDP ratio is estimated at 13% to 14%, below the recommended threshold of 15% for sustainable development. This explains the growing pressure to raise revenue.

However, the problem is that instead of expanding the tax base, we are taxing the same “goat” repeatedly and wondering why it is thinning. Tax fatigue will inevitably set in due to frequent indirect taxes that are disproportionate to service delivery. Economically, this creates a low compliance equilibrium—a situation where citizens prioritize survival over tax compliance, effectively saying, “Let me survive first; URA can wait.”

At this rate, we may soon tax oxygen. But before that happens, we should consider less painful alternatives. We need to broaden the tax base by formalizing and digitizing informal businesses. As the saying goes, don’t squeeze the same orange, find more oranges.

For how long will we ignore the reality of unreasonable tax leakages and exemptions that cost Uganda trillions of shillings? Recovering even 30% of these losses could significantly ease the burden. The recurring issue remains government inefficiency. Simply put, before raising taxes, we must reduce wasteful expenditure on non-productive items like excessive entertainment and refreshments in public budgets.

Fiscal discipline is not just about collecting more, it is about wasting less.

That said, we may need to rethink our approach. Otherwise, the taxpayer will continue funding national development while remaining individually underdeveloped. The tax proposals are not entirely irrational, they are fiscally understandable, but in real terms, they are economically distortionary and socially regressive.

Those shaping Uganda’s future must now decide: do we build a tax system that is easy to collect, or one that is fair, friendly, and sustainable?

Mr. Jude Opolot Akol is a holder of B.A Economics