Taxed at Every Turn: The Growing Cost of Living in Uganda

For millions of Ugandans, taxation does not begin when a salary is paid or a business makes a profit. It begins the moment they wake up.

From the electricity used to boil water for morning tea to the transport fare paid on the way to work, taxes are embedded in nearly every aspect of daily life. Whether buying bread, topping up airtime, withdrawing mobile money, fueling a vehicle or purchasing household essentials, Ugandans are constantly contributing to government revenue—often without realizing the full extent of their tax burden.

According to recent analysis, taxes hidden within fuel, food, utilities, telecommunications and consumer goods consume between 20 and 50 percent of the income of many Ugandans. For low-income earners already struggling with the rising cost of living, this translates into thousands of shillings lost every day through indirect taxation.

A worker who receives a transport allowance pays Pay As You Earn (PAYE) tax on that benefit. Every litre of fuel purchased attracts multiple taxes, while mobile money users face taxes on withdrawals, service fees and airtime. Even basic necessities such as soap, milk, sugar and bread are affected by Value Added Tax (VAT), increasing the cost of everyday survival.

Critics argue that Uganda’s tax system places a disproportionate burden on ordinary citizens because indirect taxes affect everyone regardless of income. A wealthy executive and a market vendor both pay VAT on the same loaf of bread, despite vast differences in their earnings. As a result, many economists believe the country’s tax structure increasingly targets consumption rather than wealth.

The frustration is compounded by concerns over public service delivery. Despite paying taxes at nearly every turn, many Ugandans continue to rely on private healthcare, private schools and personal security services. Questions are increasingly being asked about whether taxpayers receive value for the money they contribute to the national treasury.

Civil society groups and policy analysts have also pointed to rising public debt, corruption and generous tax exemptions granted to certain investors as evidence that the burden is not being shared equally. They argue that while ordinary citizens shoulder increasing taxes, billions of shillings continue to be lost through inefficiency, waste and illicit financial flows.

Government officials, however, maintain that taxes such as VAT are necessary to fund public services and ensure fairness across the economy. They argue that indirect taxes remain one of the most effective ways of raising domestic revenue in a developing country.

The debate ultimately goes beyond taxation itself. Most Ugandans accept the need to pay taxes. What many are demanding is a system that delivers visible improvements in healthcare, education, infrastructure and public accountability. Until then, the daily burden of taxation will remain a source of frustration for households already stretched by economic pressures.

For the ordinary Ugandan, the tax clock never really stops ticking.

Source DAILYMONITOR