Uganda’s Trade and Revenue Effects with the EAC Countries, DRC and Sudan

Abstract

A WITS partial equilibrium model is used to perform simulations on Uganda’s trade and revenue effects with the EAC countries, DRC and Sudan using highly disaggregated HSC six-digit level trade data. At the zero percent tariff rate, tariff revenue effects in all country cases were small. At the 25 percent tariff rate, tariff revenue effects in all country cases simulated were large. This indicates that the revenue implications of changes of applied rates depend on the applied tariff rate on imports. High tariff rates show larger revenue effects, while low tariff rates show lower revenue effects. However higher tariff rates show lower trade volumes and lower tariff rates high trade volumes.