Graduated tax is one of the example of direct tax with the rate that increases as the amount to be taxed increases. It was introduced in Uganda during the Colonial days as a replacement to the hut tax. Despite the significance and importance of the tax to the local government of Uganda,there has been pressure from some politicians to abolish the tax arguing that it was primitive and crudely collected. In 2005,the Government of Republic of Uganda decided to abolish the graduated tax. Find out from this research on how the the abolition of graduated tax has affected both the Government and the tax payers of Uganda.