Gov’t targets Shs45.6 trillion in domestic revenue for FY2026/27 budget

The Government has set an ambitious target of collecting Shs45.6 trillion in domestic revenue during the 2026/27 Financial Year with an aim to finance Uganda’s development agenda through locally generated resources while strengthening fiscal discipline, preparing for oil revenues and reducing dependence on borrowing.

The target, announced by the Ministry of Finance, Planning and Economic Development as the country officially entered the new financial year on Wednesday, represents an increase of almost Shs10 trillion from the projected Shs35.7 trillion in domestic revenue for FY2025/26.

The increase comes as Government embarks on implementing the Shs88.99 trillion national budget, the largest in Uganda’s history, which is anchored on accelerating economic transformation through the Ten-Fold Growth Strategy and the Fourth National Development Plan (NDP IV).

In its fiscal policy statement marking the start of FY2026/27, the Ministry of Finance said Government’s priority over the medium term will be to ensure public resources are directed towards sectors capable of sustaining high economic growth while preserving macroeconomic stability.

“During FY2026/27 and the medium term, our fiscal policy will ensure that resources are efficiently allocated towards growth-enhancing sectors, aligned with the Ten-Fold Growth Strategy and the National Development Plan IV,” the ministry said.

The ministry added that fiscal policy will remain focused on maintaining debt sustainability through continued efforts to reduce the fiscal deficit and keep it within prudent limits without slowing investment in priority sectors.

At the heart of the new fiscal strategy is a significant expansion of domestic revenue mobilisation, with Government seeking to finance a greater share of its expenditure from taxes and other locally generated revenues.

Finance officials say the increase will be achieved through broadening the tax base, strengthening tax administration, improving compliance among taxpayers and sealing loopholes that continue to deny Government billions of shillings in revenue every year.

The strategy is expected to reduce reliance on external borrowing and provide Government with greater fiscal space to finance critical public investments.

The increased domestic revenue will support implementation of priority programmes under the FY2026/27 budget, including investments in agro-industrialisation, tourism development, mineral-based industrialisation, science, technology and innovation, digital transformation, transport infrastructure, energy, education, healthcare and wealth creation.

The budget also provides funding for national security, governance, social protection, water and environmental conservation, all of which Government considers essential for achieving sustainable economic growth.

The Ministry of Finance said another major pillar of the fiscal strategy will be harnessing revenues from Uganda’s oil sector once commercial production begins.

Officials said Government is putting in place mechanisms to ensure oil revenues are collected efficiently, managed transparently and invested prudently to support long-term national development.

The expected oil income is projected to complement domestic revenue and strengthen Uganda’s fiscal position over the coming years as the country seeks to expand its productive sectors and accelerate industrialisation.

Alongside increasing revenue, Government says it will tighten controls on public expenditure to ensure every shilling appropriated by Parliament delivers value for money.

The ministry said expenditure rationalisation will remain a priority through stronger expenditure controls, elimination of wasteful spending and closer monitoring of budget execution across Ministries, Departments and Agencies.

One of the most far-reaching reforms announced for the new financial year is the introduction of a Budget Discipline and Accountability Charter that every Accounting Officer will be required to sign as part of their annual performance contracts.

“As part of the performance contracts, all Accounting Officers will sign a Budget Discipline and Accountability Charter which provides for sanctions against breaches of accountability rules in planning, budgeting and execution of public resources,” the ministry said.

The charter is intended to strengthen accountability across Government institutions by making accounting officers personally responsible for ensuring compliance with public finance management laws and regulations.

The measure will improve budget credibility, reduce financial mismanagement and enhance transparency in the utilisation of public resources.

Government also pledged to strengthen the country’s public financial management systems through better planning, budgeting, expenditure monitoring and financial reporting to ensure taxpayers receive maximum value from public expenditure.

On public debt, the Ministry reaffirmed its commitment to prudent borrowing, saying Government will continue carefully assessing financing options before contracting new loans.

The strategy includes prioritising concessional borrowing with favourable terms, strengthening debt portfolio management and ensuring that borrowed resources are invested in projects capable of generating economic returns.

The approach is intended to preserve debt sustainability while maintaining sufficient investment in infrastructure and other strategic sectors that support long-term growth.

The fiscal policy comes at a time when Uganda’s economy continues to register resilient growth supported by improved agricultural production, expanding industrial activity, recovery in services, increasing exports and sustained public investment.

The positive macroeconomic conditions, combined with stronger domestic revenue mobilisation and anticipated oil revenues, to provide a solid foundation for faster economic expansion in the years ahead.

Implementation of the FY2026/27 budget will largely focus on the Government’s Ten-Fold Growth Strategy, whose objective is to expand the size of Uganda’s economy through higher productivity, increased private sector investment, value addition, export promotion, job creation and improved household incomes.

The efficient implementation of the fiscal policy will be critical in ensuring that public resources are channelled towards programmes that directly contribute to economic transformation while safeguarding macroeconomic stability.

Government says the combination of record domestic revenue mobilisation, tighter expenditure controls, stronger accountability measures, prudent borrowing and the anticipated commencement of commercial oil production will place Uganda on a firmer fiscal footing and support its long-term ambition of achieving inclusive and sustainable economic growth.

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