URA Banks On Tax Reforms To Meet UGX40 trillion Revenue Target

The Uganda Revenue Authority (URA) says Uganda can achieve its ambitious domestic revenue targets over the next four years, provided government, businesses and taxpayers play their part in expanding the country’s tax base. 

The domestic revenue target was set at 46 trillion shillings for the 2026/27 financial year, with URA expected to collect 40.16 trillion shillings in taxes. 

The government has embarked on one of its most ambitious revenue mobilisation drives, seeking to increase tax collections from 14.2 percent to 20 percent of GDP within four years.

That is one of the most ambitious domestic revenue mobilization drives Uganda has undertaken. The country is entering a period where the government seeks to finance more of its development from domestic resources rather than debt. 

The change is due to the fact that public debt has risen over the past decade, making debt servicing one of the fastest-growing budget expenditures. 


Uganda expects to begin earning oil revenues, but those revenues alone will not be enough to finance government ambitions, meaning tax revenue remains the backbone of the budget. 

The ambitious plan comes as the government tries to reduce reliance on borrowing and finance its development agenda from domestic resources. 

The target means businesses and taxpayers should expect tighter enforcement, broader tax compliance measures and continued reforms aimed at bringing more economic activity into the tax net.

Speaking at the launch of the National Post-Budget Dialogue in Kampala, Finance Minister Henry Musasizi said increasing domestic revenue will enable the government to reduce dependence on borrowing and finance more development projects using locally generated resources. 

He said success will depend not only on stronger tax administration but also on improving public services so that citizens willingly pay taxes.


URA Commissioner General John Musinguzi said achieving the revenue targets would significantly reduce borrowing and debt servicing costs, allowing government to allocate more resources to essential public services. 

He attributed the optimism to recent tax reforms approved by Parliament, which he said will improve tax compliance while creating a better environment for businesses. 

Although the 2025/26 financial year closed with a slight revenue shortfall, Musinguzi said tax collections increased from about 13 percent of GDP to 14.2 percent, demonstrating that the medium-term target is attainable.

Among the reforms is a revision of penalties under the Electronic Fiscal Receipting and Invoicing Solution (EFRIS). 

The penalty for failing to comply has been changed from a flat five million shillings to twice the tax due on the goods or services involved, or ten currency points, whichever is higher. 

Musinguzi acknowledged that some of the amendments may initially affect businesses but said they are intended to improve compliance while creating a fairer tax system.


The Ministry of Finance says government is strengthening URA through improved technology, data analytics and digital systems to enhance compliance while making tax administration more efficient. 

Moses Kaggwa, Director of Economic Affairs at the Ministry, said the objective is to broaden the tax base rather than increase tax rates. 

He said voluntary tax compliance can only be sustained if more Ugandans are economically empowered through initiatives such as the Parish Development Model and other wealth creation programmes.

“As we mobilise revenue, we must do it humanely. Government should relate with taxpayers as partners in national development, not as though every taxpayer is a suspect,” he said.