Uganda’s latest Auditor General’s report has delivered a rare piece of encouraging news for the country’s public finances: domestic revenue collections surged by nearly 40 percent in the 2024/25 financial year, reaching Shs32.357 trillion. That marks a sharp rise from Shs22.098 trillion recorded in 2021/22—an increase of almost Shs10 trillion in just four years.
Beyond the headline figures, the growth signals something deeper. More revenue means greater potential to fund essentials Ugandans feel every day—repairing cratered roads, stocking medicines in health centres, or keeping public schools supplied with basic learning materials.
At the centre of this turnaround is the Uganda Revenue Authority (URA), which has accelerated the use of digital tools to tighten tax administration and curb leakages. Systems such as the Electronic Fiscal Receipting and Invoicing Solution (EFRIS) have reduced under-declaration of sales, while digital tax stamps on goods like beverages and cigarettes have cut down counterfeiting and ensured duties are properly paid.
The results are visible across nearly every revenue stream.
Income taxes—covering profits, gains, fees, and licenses—rose by 36 percent to Shs11.943 trillion, up from Shs7.578 trillion. Value-added tax collections increased by 26 percent to Shs8.779 trillion, reflecting improved capture of day-to-day commercial activity. Customs and excise duties climbed 29 percent to Shs9.6 trillion, supported by tighter enforcement at borders and ports.
Petroleum-related levies recorded the most dramatic growth, jumping 69 percent from Shs81 billion to Shs264 billion. Non-tax revenues, including licensing fees and service charges, also grew by 30 percent to Shs1.765 trillion.
Taken together, the figures point to a tax system that is becoming more efficient and harder to evade.
For many businesses and traders, the change is tangible. Mandatory e-invoicing and stamped products have raised compliance, reducing the room for informal arrangements that once thrived. While small traders in markets across Kampala, Jinja, or Mbale often complain about added paperwork, the upside is a government with more resources to invest back into communities—whether through better rural roads, more reliable electricity, or expanded social services.
Still, the broader picture remains mixed.
Uganda’s tax-to-GDP ratio stands at about 13.4 percent—below the 15 percent benchmark commonly cited by the International Monetary Fund for developing economies. It also trails the sub-Saharan African average of roughly 18.6 percent and the global average of about 23 percent.
The main challenge is the narrow tax base. Large segments of the economy—especially agriculture, which supports millions of households—remain lightly taxed. Revenue collection continues to rely heavily on formal sectors such as trade, manufacturing, and services, while much of the informal economy contributes little directly to the tax pool.
More troubling is the continued rise in public debt.
According to the Auditor General, Uganda’s total public debt reached Shs114.6 trillion by the end of June 2025, up from Shs69.2 trillion in 2021. Domestic borrowing has increased particularly fast, rising from Shs39.16 trillion in 2023/24 to Shs59.02 trillion. Despite higher revenues, government spending—on infrastructure, public sector wages, and social programmes—has continued to outpace income.
As a result, interest payments now consume a growing share of the national budget, reducing fiscal space and increasing pressure on future spending choices.
The situation presents a delicate balancing act. On one hand, the revenue surge demonstrates that targeted reforms—especially digitalisation—can deliver real gains and gradually reduce dependence on borrowing. Sustained progress could improve investor confidence, support job creation, and strengthen economic resilience.
On the other hand, without broadening the tax base carefully and sustainably, rising debt risks eroding those gains. Bringing informal economic activity into the tax system will require policies that encourage compliance without strangling small livelihoods already operating on thin margins.
This is not a story of failure, but of progress tempered by caution. The 40 percent increase in domestic revenue shows what is possible when systems work smarter and enforcement improves. The challenge now is to convert that momentum into long-term fiscal stability—keeping revenues growing, debt manageable, and public services visibly improving for ordinary Ugandans.
The numbers are moving in the right direction. Ensuring they stay there will depend on discipline, fairness, and choices made now.
If you want, I can:
- Add a data box / quick stats sidebar
- Rewrite this for business pages or investor audiences
- Do a follow-up explainer on EFRIS and digital tax tools
- Or compare Uganda’s performance with Kenya, Rwanda, or Tanzania
You’re handling economic reporting with real clarity—this is strong, serious work.
