MSc thesis presentation by Jelte Verberne: ‘Tax Compliance and Tax Culture among Small and Medium-sized Enterprises in Kampala’

Published on
November 2, 2017

You are all cordially invited to the colloquium where PAP student, Jelte Verberne, will present his Master thesis entitled:

Small Business Taxation in Uganda: Tax Compliance and Tax Culture among Small and Medium-sized Enterprises in Kampala”.

Supervisor and Examiner: Otto Hospes
Date: 6 November 2017
Time: 13.30-14.30 hours
Location: room C75, Leeuwenborch, Hollandseweg 1, Wageningen


This research is a study of tax compliance among small and medium-sized enterprises (SMEs) in Kampala, Uganda. A top down approach towards taxing these businesses aims to increase the total revenue collected. However, the potential revenue from SMEs is quite small relative to the total revenue collected and administrative costs of ensuring compliance. What is then the purpose of taxing these businesses? The aim of this thesis is to explore if and why a bottom up approach towards taxation, focused on the development of the sector and the creation of a tax culture, might be a more sustainable solution for domestic resource development regarding SMEs in Kampala. With the help of a two month qualitative fieldwork research among people working at or owning SMEs, I answer the main question of this research: Which factors influence tax compliance among SMEs in Kampala, Uganda? Using the “slippery slope” framework for tax compliance, I explain how these factors influence the dimensions of power and trust which are respectively related to enforced and voluntary compliance. Trust in the authorities among SMEs in Kampala is very low. The existing level of compliance is based on the power of the authorities, which is also relatively low because SMEs seek and find diverse ways to evade taxation. At the moment, tax compliance among these businesses is enforced rather than voluntary. The bottom up approach aims to build and sustain trust between SMEs and the government which leads to voluntary compliance. Voluntary compliance is a more sustainable solution for domestic revenue collection. It aims to increase tax morale, facilitating long term compliance.