Value added tax and its contribution to domestic revenue :

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Kampala International University, College of Economics and Management
The purpose of this study was to investigate the degree of contribution of VALUE ADDED TAX (VAT) on the domestic revenues collected by the Uganda Revenue Authority. The research was inspired by the view that the researcher having read a series of literature on Value Added Tax followed by theories on the enormous contributions anticipated initially from VAT. Studies by some authors revealed that VAT had led to substantive contributions to total domestic collections in other countries like Kenya, South Africa, and Nigeria among others and same was and is hoped to add amounts needed to develop the economy and avoid debts leading to own dependence. This, therefore, made the researcher to design research questions of the study basing on the above foundation to prove whether or not VAT comes in handy with benefits and find reasons why it still performs dismally. The instruments used in data collection were mostly records got from previous reports of URA, guides from URA officials and internet. The trend of revenue performance showed that introduction of VAT led to a tremendous increase in domestic revenue by 9.98% per year as compared to 2.54% before it was introduced. This therefore meant that there was a significant contribution by VAT to the countries domestic revenue, VAT also had appositive influence on gross domestic product of about 20,000-40000 which almost doubled the revenue (10,000-20,000) for before existence of this tax confirming appositive initiative taken by government to introduce VAT. Following all the findings and interpretations made thereon, the researcher had to come out with among others; Government should undertake more simplifications of the VAT approaches, the MFPED should carry out more technical reviews on the VAT on sale of residential properties and tax investment incentives for international companies, the tax body should investigate and register all VAT taxpayers above the gazette threshold, taking care to identifying those taxpayers who are splitting their turnover with an intention of evading the VAT process.
A research dissertation submitted to the college of economics and management sciences in partial fulfillment of requirements for the award of Bachelors’ Degree of Economics and Applied Statistics of Kampala International University
Value added tax, domestic revenue, Uganda revenue authority