Evolution of the law on income taxation of small businesses in Uganda

Abstract

Purpose This paper aims to analyse how the law on income taxation of small businesses in Uganda has evolved from the pre-colonial to the present day. Design/methodology/approach The study used doctrinal legal research based on existing documentation on empirical research from Ugandan laws, institutional writings, books and journal articles. Findings The study established that there has been various promulgations and amendment of the law on income taxation of small businesses geared at simplifying the law, expanding the tax base and improving the tax yield from this sector. However, the law still bears limitations, some of which have existed from way back before the current legal regime on presumptive tax. Thus, the income tax yield from small businesses continues to be low over the years. It posits that it is not clear whether small business owners understand the legislations on presumptive income tax to enable us to determine with certainty that further amendments have the potential of enhancing an increased tax yield, which has not been attained over the years. Originality/value Limited work has been undertaken on the historical development of the income taxation of small businesses in a developing country like Uganda. This study provides an initial synthesis of the literature on the evolution of income tax laws for small businesses in an economy that had been earlier neglected by scholars.