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The taxation system in Uganda faces several weaknesses, including a narrow tax base, which limits revenue generation and reliance on a few large taxpayers. Additionally, issues such as tax evasion, corruption, and inefficiencies in tax administration hinder effective collection. The complexity of the tax code and lack of taxpayer education further exacerbate compliance challenges. Lastly, the informal sector, which constitutes a significant part of the economy, remains largely untaxed, reducing overall tax revenue.

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