Overview:
Total revenues and grants for October amounted to Shs 2.57 trillion, representing 89.2% of the projected target. The report attributes the resulting Shs 311.8 billion shortfall to weak revenue performance:
Uganda’s fiscal position tightened in October 2025 as government operations closed the month with a wider-than-expected deficit, according to the latest Performance of the Economy Report.
Preliminary data shows that government registered an overall fiscal deficit of Shs 1.48 trillion, exceeding the planned Shs 1.35 trillion for the month. The report notes that this was driven by “shortfalls in domestic revenue collections and grants, coupled with higher-than-programmed expenses.”
Total revenues and grants for October amounted to Shs 2.57 trillion, representing 89.2% of the projected target. The report attributes the resulting Shs 311.8 billion shortfall to weak revenue performance:
“Domestic revenue collections and grant disbursements were lower than anticipated, creating a financing gap for the month.”
Domestic revenues posted Shs 2.53 trillion, falling short by Shs 151.1 billion. According to the report, “Direct domestic taxes underperformed due to lower-than-expected PAYE and Treasury Bill receipts.”
The PAYE shortfall, it explains, arose from “payroll transition challenges as some Local Governments migrated to the new Human Capital Management (HCM) system.”
Indirect domestic taxes also fell short by Shs 13.4 billion, largely due to weaker excise duty performance. The report highlights reductions in collections from “beer, soft drinks, and phone talk time.”
In contrast, taxes on international trade slightly exceeded expectations, recording a surplus of Shs 9.44 billion, supported by stronger-than-projected petroleum duty, import levies, and infrastructure levies.
Non-tax revenue collected Shs 159.89 billion, missing the target by Shs 103.36 billion. The report attributes this to “reduced demand for government services that generate Non-Tax Revenue, including passports and registration services.”
Cumulatively, domestic revenue collections for July–October reached Shs 10.16 trillion, falling short of projections by Shs 453.94 billion.
Grant inflows were significantly below target, amounting to just Shs 43.45 billion against a projected Shs 204.15 billion. The report states:
“The underperformance in grants is attributed to the non-receipt of budget support and lower-than-projected disbursements for project support.”
Despite revenue pressures, government spending rose above programmed levels. Total expenditure for October reached Shs 3.27 trillion, or 104.3% of the monthly plan.
The report notes that this was driven by “higher-than-planned spending on grants, particularly to Local Governments, and increased expenditure on goods and services.”
Grants to Ministries, Departments and Agencies amounted to Shs 1.12 trillion, above the programmed Shs 973 billion. Spending on goods and services totaled Shs 784 billion, slightly above target.
The only major spending category that fell below projection was capital investment. Net acquisition of non-financial assets amounted to Shs 780.71 billion, well below the targeted Shs 1.10 trillion. The report explains:
“The shortfall was due to delays in disbursements for externally funded projects during the month.”