Government has unveiled a huge Shs84.39 trillion national budget for Financial Year 2026/27, with Finance Minister Henry Musasizi laying bare a detailed financing plan showing heavy reliance on taxes, domestic borrowing, debt refinancing and external loans as Uganda pushes its ambitious transformation agenda. Musasizi told Parliament that the total resource envelope stands at Shs84,391,743,343,426, saying […]
Government has unveiled a huge Shs84.39 trillion national budget for Financial Year 2026/27, with Finance Minister Henry Musasizi laying bare a detailed financing plan showing heavy reliance on taxes, domestic borrowing, debt refinancing and external loans as Uganda pushes its ambitious transformation agenda.
Musasizi told Parliament that the total resource envelope stands at Shs84,391,743,343,426, saying the budget is designed to drive production, jobs and wealth creation while also managing rising debt and expanding government services across all sectors.
He revealed that the biggest source of funding will be domestic revenue at Shs45.96 trillion, with Shs40.16 trillion expected from tax collections, Shs4.02 trillion from non-tax revenue, Shs1.44 trillion from petroleum income and Shs339.8 billion from local government revenue, showing how heavily the budget depends on Ugandans’ tax contributions.
Government will also borrow Shs11.97 trillion from the local market, relying on banks, pension funds, insurance companies and Treasury instruments, while a further Shs13.97 trillion will go into refinancing old debt, meaning a large portion of the budget is already tied to repaying previous borrowing.
External support will also play a role, with Shs1.22 trillion expected as budget support loans and Shs11.27 trillion coming as project financing tied to roads, power, water and other infrastructure developments.
On how the money will be spent, Musasizi said Shs9.709 trillion will go to salaries and wages, while Shs33.276 trillion will fund government operations, programmes, medicines, schools, health services, infrastructure maintenance and interest payments on debt.
Development projects take Shs22.054 trillion, as government continues major investments in roads, electricity, industrial parks, water systems and production sectors meant to grow the economy.
Debt repayment remains a major burden, with Shs13.967 trillion set aside for refinancing domestic debt, Shs4.181 trillion for amortisation, Shs547 billion for Bank of Uganda obligations and Shs317 billion for arrears.
Musasizi said the budget has increased by Shs2.78 trillion compared to last financial year, reflecting rising government spending needs and expansion of development priorities.
He also announced a fresh wave of tax measures expected to raise more revenue, with Parliament approving changes across income tax, VAT, excise duty, trade taxes and stamp duty.
Workers earning low salaries will get some relief after Parliament raised the PAYE threshold from Shs235,000 to Shs335,000, while foreign lenders will now face a 5 percent withholding tax on interest payments.
Small businesses will benefit from VAT reforms that raise the registration threshold from Shs150 million to Shs300 million, but consumers will feel pressure from higher excise duties.
Fuel prices are set to rise after government increased taxes by Shs200 per litre, while alcohol, sugar, cooking oil, cement, motorcycles, paints, plastics and other goods also face higher levies.
Betting and gaming taxes have been increased to 30 percent, while used clothing imports will now attract 30 percent duty, as government moves to widen the tax base and boost revenue collection.
At the same time, tax waivers and penalty reliefs have been introduced for older debts in a bid to improve compliance and clear arrears.
Musasizi said Uganda’s economy is now valued at about USD 69 billion and continues to grow, supported by exports, tourism, remittances and investor inflows, with expectations of stronger growth once oil production begins.
He said almost all discretionary spending has been channelled into priority sectors under the ATMS strategy, including agriculture, tourism, minerals, oil and gas, and science and innovation.
Musasizi said the aim is to shift Uganda into a production-driven economy that produces more, exports more and creates jobs, insisting the country has now entered a “No More Sleep” era focused on results and implementation.
