Business
Government exceeds revenue target by Sh800b
Domestic revenue collections reached Sh5.72 trillion, of which Sh5.57 trillion came from taxes and Sh156.33b from non-tax revenue.
Taxes on international trade and transactions also outperformed by Sh264.80b, supported by higher collections from petroleum duty, import VAT, import duty and the infrastructure levy.
By: Sarah Nabakooza, Journalist @New Vision
KAMPALA - Government exceeded its revenue target by more than Sh800 billion in June 2026, according to the Ministry of Finance's latest Performance of the Economy Report.
Preliminary figures contained in the June 2026 report show that government operations recorded a net lending (fiscal surplus) of Sh517.07b, against the planned net borrowing (fiscal deficit) of Sh690.73b.
The ministry attributed the stronger-than-expected performance to higher domestic revenue collections and lower spending on development projects.
Total revenue collections for June 2026, including grants, amounted to Sh5.81 trillion, surpassing the target of Sh5.01 trillion by Sh800.9b.
The strong performance was driven entirely by tax revenue, which exceeded its monthly target by Sh1.01 trillion, even as non-tax revenue and grants fell short of their targets.
Domestic revenue collections reached Sh5.72 trillion, of which Sh5.57 trillion came from taxes and Sh156.33b from non-tax revenue.
The Ministry of Finance attributed the tax outturn to enhanced tax administration and improved taxpayer compliance at the close of the financial year.
Direct domestic taxes recorded the largest surplus, exceeding the target by Sh735.51b, largely due to stronger-than-expected collections from corporation tax, Pay As You Earn (PAYE) and withholding tax.
Consumption taxes also surpassed the target by Sh20.11b, driven mainly by Value Added Tax (VAT) on products such as beer, sugar and bottled water, as well as improved collections from the construction, wholesale and retail trade sectors.
Domestic revenue collections reached Sh5.72 trillion, of which Sh5.57 trillion came from taxes and Sh156.33b from non-tax revenue.
The Ministry of Finance attributed the tax outturn to enhanced tax administration and improved taxpayer compliance at the close of the financial year.
Direct domestic taxes recorded the largest surplus, exceeding the target by Sh735.51b, largely due to stronger-than-expected collections from corporation tax, Pay As You Earn (PAYE) and withholding tax.
Consumption taxes also surpassed the target by Sh20.11b, driven mainly by Value Added Tax (VAT) on products such as beer, sugar and bottled water, as well as improved collections from the construction, wholesale and retail trade sectors.
Taxes on international trade and transactions also outperformed by Sh264.80b, supported by higher collections from petroleum duty, import VAT, import duty and the infrastructure levy.
According to the report, the improved performance was driven by better taxpayer compliance and enhanced tax administration during the final month of the 2025/26 financial year.
While revenues exceeded expectations, government expenditure remained below target.
Total expenditure, including recurrent spending and net acquisition of non-financial assets, stood at Sh5.29 trillion, compared to the planned Sh5.70 trillion, representing an underperformance of about Sh406.9b.
The report attributes the lower expenditure mainly to slower implementation of development projects, reflected in reduced spending on the acquisition of non-financial assets.
The fiscal outturn marked a significant turnaround from the budget projections, with stronger revenue performance more than offsetting lower-than-programmed expenditure.
According to the report, the improved performance was driven by better taxpayer compliance and enhanced tax administration during the final month of the 2025/26 financial year.
While revenues exceeded expectations, government expenditure remained below target.
Total expenditure, including recurrent spending and net acquisition of non-financial assets, stood at Sh5.29 trillion, compared to the planned Sh5.70 trillion, representing an underperformance of about Sh406.9b.
The report attributes the lower expenditure mainly to slower implementation of development projects, reflected in reduced spending on the acquisition of non-financial assets.
The fiscal outturn marked a significant turnaround from the budget projections, with stronger revenue performance more than offsetting lower-than-programmed expenditure.