URA seeks sh877b budget, half-year collections hit sh16.8 trillion

KAMPALA - The Uganda Revenue Authority (URA) has requested a budget allocation of sh877.396 billion for the financial year 2026/2027 as it intensifies efforts to boost domestic revenue mobilisation and support the nation’s long-term social and economic development.

The funding request was made during the presentation of the Ministerial Policy Statement (MPS) to the parliamentary committee on finance, planning and economic development today.

During the meeting, the Authority team emphasised the central role of URA in financing national priorities under the Fourth National Development Plan (NDPIV).

State Minister for Finance in charge of general duties, Henry Musasizi, noted that URA remains a critical implementing agency under the Development Plan Implementation Programme, with a primary focus on enhancing resource mobilisation and strengthening institutional capacity.“The allocation is structured to sustain revenue mobilisation efforts, strengthen compliance and administrative efficiency, and support strategic investments necessary to harness emerging opportunities, including those associated with increased economic activity and the onset of oil and gas production,” he said.

Strong performance despite shortfallThe policy presentation comes against the backdrop of URA’s half-year revenue performance for FY 2025/2026, where the authority collected sh16.84 trillion, representing 93.69 % of its target.

This marks an 8% growth compared to the same period in the previous financial year. However, the authority registered a shortfall of sh1.134 trillion, which the authority attributed to slowed economic activity during the election period and limited integration between URA systems and other government agencies.

Appearing before the parliamentary committee on finance, planning and economic development, Abel Kagumire, Commissioner for Executive Office Operations at URA, said both domestic and international trade taxes played a key role in driving collections.

Domestic taxes accounted for sh10.926 trillion, achieving 93.21 percent of the target and growing by 7.55 percent, while international trade taxes contributed sh5.917 trillion, reflecting 94.58 percent performance and 8.84 percent growth.

Expanding the tax baseAccording to the latest report, URA also registered significant progress in expanding the taxpayer base, adding 236,673 new taxpayers, a 4.51 percent increase in the register.

Kagumire said compliance remains a top priority, with on-time filing rates for Pay As You Earn (PAYE) at 86.46 percent and Value Added Tax (VAT) at 87.74 percent, slightly below the 90 percent target.

To address compliance gaps and improve efficiency, the authority is rolling out several interventions, including increased use of technology, taxpayer sensitisation campaigns, data sharing with government agencies, and a strict zero-tolerance approach to corruption.

Ambitious sh41 trillion target

URA revealed an ambitious revenue target of sh41.513 trillion for FY 2026/2027, an increase of sh4.286 trillion from the current financial year.

To achieve this, the authority plans strategic investments in infrastructure and technology. These include funding for the Mbale Regional Office, upgrades to IT systems and data centres, and enhancements to the E-Tax platform, including specialised solutions for the petroleum, oil, and gas sector.

MPs raise accountability concernsMembers of Parliament commended URA for its performance but raised concerns about inefficiencies and expenditure priorities.

Jane Pacuto Avur, Woman MP for Pakwach District (NRM), pointed to inefficiencies in bonded warehouse operations, warning that prolonged storage of goods delays revenue collection.“My concern is that there are too many bonded warehouses with too many vehicles. This is hampering revenue collection. What will you do more to improve the warehousing system?” she asked.

Ibrahim Ssemujju, MP for Kira Municipality, questioned URA’s continued spending on rent despite owning office infrastructure, particularly the Nakawa building.“Looking at the amount budgeted for rent at sh12 billion, that money in the next five years would build URA an office. Why do you keep spending money on rent?” he queried.

He also raised concerns over allocations for welfare and entertainment (sh23.2 billion), workshops and seminars (sh13.4 billion), and medical expenses (sh20.27 billion), questioning their necessity in light of URA’s core mandate.

Structural challenges persistResponding to concerns, Musasizi highlighted broader structural challenges affecting revenue mobilisation.

He cited smuggling across the East African Community (EAC) as a major issue, warning that disparities in tax regimes among member states create loopholes for illicit trade.“We are not alone in the EAC. If we introduce tax measures far above those of other countries, we create an opportunity for smuggling,” he said.

Musasizi also pointed to widespread business informality, noting that many enterprises avoid formal registration due to fear of taxation.

Additionally, he emphasised the role of infrastructure in revenue performance, particularly transport bottlenecks. “We can’t achieve much when we are not working on our transport system. Traffic on Jinja Road is terrible, and we should find solutions,” he added.

The Minister called on Parliament to approve the proposed budget and planned activities, stressing that effective implementation will be critical in improving Uganda’s tax-to-GDP ratio and sustaining economic growth.“Your commitment to strengthening Uganda’s tax systems remains invaluable. I kindly request your approval to enable achievement of our strategic objectives,” the Minister said.