Trade Liberalization and Tax Revenue Performance in Uganda

Abstract

The study uses fixed and random effects models to establish the determinants of tax revenue performance. The data cover the period 1994 to 2012, with the results suggesting that exchange rates, trade openness and share of industry to GDP positively influence tax revenue performance while the agriculture share to GDP and foreign aid negatively influence tax revenue performance. Importantly the coefficient for trade openness that is used as a proxy for trade liberalization indicates a positive influence on tax revenue performance.