KAMPALA, UGANDA — The Ugandan government fell short of its tax revenue target by Shs 92.16 billion in March 2025, according to the latest Performance of the Economy Report released by the Ministry of Finance.
Total tax collections reached Shs 2,206.43 billion, failing to meet the monthly goal of Shs 2,298.59 billion, even as government expenditure outpaced projections.
Revenue Breakdown: Across-the-Board Declines
Domestic Direct Taxes:
- Collected: Shs 807.51B
- Shortfall: Shs 31.59B
- Cause: Weak performance in withholding taxes from dividends, foreign transactions, and T-Bill interest
Indirect Domestic Taxes:
- Collected: Shs 614.02B
- Shortfall: Shs 5.24B
- Notable declines in:
- Excise duty: –Shs 2.88B
- VAT: –Shs 2.46B
- Key factors: Falling consumption of beer, spirits, sugar, and soft drinks
International Trade Taxes:
- Collected: Shs 875.94B
- Shortfall: Shs 51.26B
- Main cause: Reduced petroleum imports due to volume restrictions and delays at Mombasa port
Nine-Month Outlook: Tax On Track, Non-Tax Lags
- Cumulative tax collections (July–March): Shs 20.92 trillion
- Surpassed target by Shs 45.08 billion
- Performance rate: 100.2% — a bright spot despite March’s dip
But non-tax revenues continue to underperform:
- March shortfall: Shs 74.8 billion
- Collected: Shs 136.27B out of a Shs 211.07B target
- Cumulative non-tax revenue: Shs 1.54 trillion, below the Shs 1.59 trillion target
Government Spending Exceeds Budget
Total government expenditure in March reached Shs 3,163.84 billion, Shs 35.17 billion above the plan.
Notable spending increases:
- Wages and salaries: Shs 376.68B (↑ from a target of Shs 373.17B)
- Grants to local governments and institutions: Shs 1,238.12B (↑ from a target of Shs 1,201.26B)
Officials say this reflects the government’s priority to stabilize public sector operations and maintain service delivery in health and education.
Experts Weigh In
Economists warn that the dual pressure of rising spending and slipping revenues, especially in international trade and non-tax sources, could strain the national budget if sustained.
“While tax revenue is still on track overall, these monthly fluctuations underscore the need for tighter fiscal discipline,” one analyst said.
As global uncertainties persist and regional trade routes remain volatile, the next quarter will be critical in determining Uganda’s fiscal trajectory.
