Taxing Agricultural Income in the Global South: Revisiting Uganda's National Debate

The issue of agricultural taxation has almost completely disappeared from the scholarly and policy agendas in recent decades. And yet, agriculture is taxed very lightly despite contributing substantially to GDP across many Global South countries today. In some cases, light-touch taxation may be necessary to encourage investment in the sector and to protect small and subsistence farmers. However, anecdotal evidence from countries like Uganda suggests that there are a substantial number of high-income earners engaged in agricultural activities that are sheltered almost completely from any form of taxation. More effectively taxing these high-income earners could provide much-needed resources to finance public service provision in lower-income countries. The time is ripe, this paper argues, to revitalise discussions about how best to tax the agriculture sector. This paper summarises early debates on taxation of the agriculture sector, before turning to the contemporary context of Uganda. The paper includes a discussion of some URA investigations that have begun the process of identifying high income-earners in the sector. The paper next outlines some potential strategies Uganda could pursue to tax the agriculture sector more fairly. The paper concludes with a discussion about overcoming the strongest political resistance to agricultural taxation, and a series of recommendations for the way forward.