Research Reports
An Assessment of the Informal Sector in Uganda: A Consolidated Report
Considering the widespread prevalence of informality in Uganda, the third National Development Plan (NDPIII) recognised that addressing the challenges of informality is critical for promoting private sector development, inclusive growth, and enhancing the country’s socioeconomic development.
Particularly, the NDPIII targeted reducing the size of the informal sector from 51 percent in FY 2018/19 to 45 percent in FY 2024/25. However, according to UBoS (2024), informality in Uganda accounted for 54.5 percent of the country’s GDP by the end of FY 2023/24. This 3.5 percent increase in informality partly explains the persistent low tax-to-GDP ratio registered over the years.
Additionally, the share of informal employment in total employment increased from 90.7 percent in FY 2016/17 to 92 percent in FY 2020/21 (NLFS, 2021).
In the quest to encourage formalisation in Uganda, several interventions have been implemented by the Government of Uganda (GoU). These among others, include the Taxpayer Register Expansion Programme (TREP), the introduction of the Electronic Fiscal Receipting and Invoicing System (EFRIS) to improve tax compliance and streamline record-keeping among informal enterprises, introduction of physical and electronic One-Stop Business Centres by the Uganda Registration Services Bureau (URSB), instant Tax Identification Number (TIN) registration, introduction of online trade license registration at Kampala capital City Authority (KCCA) among others.
Attached Files
File Action Informality in Uganda_Consolidated EPRC Report 2025_compressed.pdf View - Version
- File Size 4.19 MB
- Published Feb 27, 2026