Raising local authority district revenues through direct taxation in a low-income developing country: evaluating Uganda's GPT

Uganda's graduated personal tax represents a rather unusual attempt at applying a local income tax as a means of financing local authority operations in a predominantly informal, rural economy. Statistical and other analysis and comment reveal it to have serious deficiencies in terms of standard tax criteria and as a result of associated social costs, despite which local authorities have been led to increase rather than to decrease their reliance on it. Some alternative revenue-raising instruments which could serve to reduce this reliance are indicated.