Building political coalitions for effective tax reform: Lessons from Uganda

This project explores how sufficiently influential political coalitions are built to pass and implement tax reforms, and what the implications are for Ministries of Finance in designing tax policies (and development partners aiming to support them). The research draws on a review of existing literature on the political economy of Domestic Resource Mobilisation, and two detailed case studies of reforms in Uganda: the introduction and expansion of the Electronic Fiscal Reporting and Invoicing System and reforms to excise duties on tobacco and alcohol. We will principally gather data through in-depth interviews, with officials from the Ugandan Ministry of Finance and Revenue Authority,  representatives of business and professional associations, civil society groups, and tax academics and researchers.

For both case studies, the study asks the following research questions:

• What are the broad political economy factors that shape opposition and support for selected tax reforms?
• How can tax reforms be framed and communicated to maximise support and mitigate opposition?
• What are effective approaches for building coalitions of allies? How have tax reforms been able to garner support, or mitigate opposition, from non-state actors?
• How are the above considerations approached in the design of tax policy?
• How do policymakers identify and take advantage of windows of political opportunity?
• How do policymakers approach building coalitions of supporters for reform?

Research on the failure of tax reforms often cite challenges with ‘lack of political will’. While often accurate, this can be a black box offering limited practical insight. This research aims to offer pragmatic insights as to how strategic design and advocacy for tax reforms can strategically shape ‘political will’ and thus improves chances of success.