Overview:
Uganda's domestic revenue collections fell 1.05 trillion shillings short of midyear targets despite an 8.69 percent increase in year-on-year growth.
KAMPALA, Uganda — Uganda’s domestic revenue collections fell 1.05 trillion shillings short of targets in the first half of the 2025-26 fiscal year, according to the Ministry of Finance.
Cumulative collections between July and December 2025 totaled 16.87 trillion shillings, representing a 94.1 percent performance against the projected 17.93 trillion shillings.
Finance officials attributed the shortfall to several factors, including a transition to a new local government payroll system that delayed income tax remittances. Other contributors included a drop in donor funding from USAID, a decline in the value of taxable imports and the proliferation of illicit alcoholic beverages.
Despite missing the target, total collections grew 8.69 percent compared to the 15.52 trillion shillings recorded during the same period the previous year. The ministry cited increased economic activity for the year-on-year growth.
While revenue lagged, government spending in December 2025 exceeded projections. Expenditure for the month reached 2.45 trillion shillings, 6.2 percent higher than the planned 2.31 trillion shillings.
The ministry noted that the overspending was largely driven by higher costs for goods and services, including medical supplies and election-related activities. Significant funds were also disbursed to local governments for infrastructure, education and health services.
Investment in nonfinancial assets also topped targets by 230.67 billion shillings, primarily due to road and bridge projects funded through a second-quarter supplementary budget.
Despite the fiscal gap, the ministry reported that broader economic indicators remain positive. The Composite Index of Economic Activity rose to 181.48 in November, marking four consecutive months of improvement. Officials said this resilience is visible across the agriculture, mining and manufacturing sectors.