Domestic Revenue Mobilization for Development activity (DRM4D)
Strengthening tax culture and compliance for effective governance
Challenge
Despite ongoing efforts, Uganda’s revenue performance had consistently fallen short of meeting its budgetary needs. The country’s tax-to-GDP ratio had stagnated at a low 13%, according to 2019-2020 data from the Uganda Revenue Authority—well below the Sub-Saharan average of 16%. This revenue shortfall hindered Uganda’s ability to finance public expenditure and run its economy effectively. To mitigate this, the Government of Uganda developed a Domestic Revenue Mobilization Strategy (DRMS) aimed at increasing revenue generation to plug its budget deficits. Several development partners supported the Domestic Revenue Mobilization space, including our U.S. Government-funded Domestic Revenue Mobilization for Development (DRM4D) Activity.
Approach
DRM4D (2020-2025), strengthened tax culture, increased voluntary compliance, and sustainably increased domestic revenue mobilization. Cadmus (formerly Nathan Associates Inc.) led the Activity, with DT Global as a subcontractor. DT Global contributed to development of activities for tax administration under Project Component 2 and public-private dialogue on tax issues under Project Component 3, while also supporting other project deliverables.
Goals and Results
As a subcontractor, DT Global contributed to:
- Development of a capacity building training manual and training for city officials and politicians on good practices and leadership in revenue administration.
- Revenue improvement plans to enable more evidence-based budgeting and forecasting of local revenues and spending on priority services.
- Collaboration among local government officials, private sector organizations, and other project partners to encourage improved revenue collection efficiency at the city level.
- Valuations of over 165,000 properties that enabled cities to collect property tax, resulting in doubled collections in 2020/2021 and 2023/2024 fiscal years.
- Reviews of revenue regulatory frameworks for local governments.
- Digital systems audits for local government Revenue Administration Systems.
- City engagement with taxpayers and development of Fiscal Social Compacts to enhance accountability, increase public trust, and monitor implementation. These efforts significantly improved relationships between taxpayers and city officials.
- Digitization of street parking charge collection and market user fees.