Project Researchers: Adrienne Lees, ICTD & Chris Wales, ICTD

The DIGITAX programme is supporting governments in the design of financial sector tax strategies that are better aligned with national development goals. Our researchers, Christopher Wales and Adrienne Lees, are working with the Government of Uganda on a project that will inform the development of tax policy for its financial sector. The primary output will be a report in support of the Government’s Financial Sector Development Strategy. It will provide a critique of the current system of taxation for Financial Services (FS), identifying any unnecessary tax barriers to sector development and the achievement of investment and financial inclusion goals. The project scope includes a comparative analysis of the taxation of FS in Uganda and other relevant jurisdictions as well as the identification of anomalies and inconsistencies in the relative taxation of FS and digital FS that may distort the market and constrain the development of digital delivery. Our work will involve a more rigorous examination than has been made to date of the social and economic impact of Ugandan taxes imposed on digital payment mechanisms, including the tax on mobile money. Working papers covering different components of the project will be published, making a significant contribution to the literature on this important but under-researched area. Lessons drawn from this study will be relevant not only for Uganda but for many other low-income countries that face similar challenges.