This qualitative study aimed at understanding the impact caused by taxation on the economic development of Kampala. The study employed a descriptive research design with a respondent of 83 who were selected by the help of purposive, cluster and simple random sampling methods. The study aimed at understanding the; impact of taxation in improving healthcare and sanitation in Kampala, impact of trade license fees on industrial development in Kampala and impact of park user fees, private parking taxes and street parking fees on economic development of Kampala. From the findings, 75 (90.4%) agreed, 1 (1.2%) were not sure, however 7 (8%) disagreed with the statement. With respect to controlling the volume of vehicles in the city, 36 (43.4%) agreed with the statement, 2 (2.4%) were not sure with the statement however, more than half 45 (52.2%) disagreed with the measure. 53 (64%) of the respondents agreed that user park fees can lead to more optimal consumption of services, 13 (15.6%) were not sure while 17 (20.4%) disagreed with the statement The results revealed a significant impact of taxation in the development of Kampala. Fees collected from taxes to support health centers, water supply, construction of drainage channels and improving sanitation in Kampala. Other important service is the management of transport system and constructing and maintenance of roads within the city.