And the punishment does not end at PAYE. After being taxed like there is no tomorrow, the Ugandan walks into a digital economy that has been booby-trapped by the same government.
Mobile money: Uganda is the only country in the region that taxes the value of money you withdraw from your own wallet, on top of taxing the service fee. Withdraw UGX 1 million through mobile money and you part with about UGX 16,630 in fees and taxes. Do the same at a bank or ATM and you pay around UGX 3,000. Sending and withdrawing that same UGX 1 million on mobile money costs more than transporting the cash physically across Kampala. Kenya, Nigeria and South Africa do not tax the transaction value at all.
Smartphones: Uganda is the only country in the region that imposes a 10% import duty on smartphones. Kenya, Tanzania, Rwanda, Nigeria and South Africa charge zero. The result is that 61.7% of Ugandans still use feature phones, while their neighbours scroll into the future.
Airtime and data: 12% excise duty on prepaid and postpaid airtime, plus 18% VAT on top of it. Internet in Uganda remains among the most expensive in East Africa, while data spend per user is one of the lowest on the continent. Translation: we pay the most to use the least.
Rental income: Landlords cough up rental tax separately from PAYE, and individuals are taxed at 12% on gross rental income above UGX 2.82 million annually, with no deductions allowed for actual costs. Landlords do not absorb that cost. They pass it straight onto tenants, which is part of why rent in Kampala has become punishing for ordinary working people. You are taxed on your salary, then taxed again, indirectly, on the roof over your head.
Withholding tax, VAT, fuel levies, environmental levies, the digital service tax on Netflix and YouTube subscriptions, road user fees, parking levies in Kampala, and the famous "service charges" that mysteriously appear at the bottom of restaurant bills. There is no corner of life in this country that has not been monetised, taxed, fined, or assessed.
The net effect is brutal. A Ugandan in formal employment hands over the largest slice of their salary in PAYE earlier than any
@jumuiya neighbour, then pays more to send money to their mother, more to access that money, more to call their mother, more to text their mother, more to watch a film to forget their mother is also broke, and more to fill the car they need to drive to see her. By the time the average worker has finished settling all the visible and invisible taxes, what remains is barely enough to fund the dignity of a working person.
Meanwhile, those collecting the taxes are flying private, building palaces in Bukedea, and skipping the bills at international summits. Money goes up. Suffering trickles down. That is the actual model.
Why would Uganda – the poorest of them all – have the highest PAYE regime?