Govt spending rises as URA records sh246.84b shortfall
The Ministry of Finance’s performance of the economy report for July said that, in the period under review, total expenses (recurrent spending) amounted to sh5.352 trillion, above the programmed sh5.204 trillion.
Compensation of employees, purchases of goods and services, social benefits and other expenses, however, were below their respective programmed levels. (File photo)
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The Ugandan government increased spending on public services last month as Uganda Revenue Authority (URA) registered a shortfall of sh246.84 billion, largely driven by underperformance in both domestic revenue and grants.
The Ministry of Finance’s performance of the economy report for July said that, in the period under review, total expenses (recurrent spending) amounted to sh5.352 trillion, above the programmed sh5.204 trillion.
The higher-than-programmed expenses of sh148.61 billion were on account of grants from the central government to local governments and tertiary institutions, which exceeded the programmed amount.
Compensation of employees, purchases of goods and services, social benefits and other expenses, however, were below their respective programmed levels.
Compensation of employees amounted to sh591.47 billion against the planned sh607.76 billion, mainly because some wage payments were effected at the beginning of August 2026.
However, grants amounted to sh1.396 trillion, representing 127.5% of the programmed target. Of this amount, sh617.8 billion was transferred to local governments, comprising sh352.7 billion for recurrent expenditure and sh265.0 billion for development expenditure.
In July 2026, expenditure on the acquisition of non-financial assets amounted to sh238.79 billion, compared to the programmed sh456.58 billion, resulting in an underperformance of sh217.80 billion.
Of the total expenditure, sh130.17 billion was allocated to domestic development, while sh108.61 billion was disbursed for externally financed development projects.
Total revenues
Total revenue collections amounted to sh2,685.76 billion in July 2026, representing a performance rate of 91.6% against the target of sh2.932 trillion. This resulted in a shortfall of sh246.84 billion, largely driven by underperformance in both domestic revenue and grants.
Domestic revenue collections amounted to sh2.658 trillion in July 2026, against the target of sh2.901 trillion, representing a shortfall of sh243.16 billion.
Taxes on international trade registered a shortfall of sh60.05 billion against the target of sh1.070 trillion. The underperformance was mainly associated with lower-than-programmed collections from customs-related taxes, particularly import value added tax (VAT), petroleum-related taxes and other import-based taxes.
Taxes on goods and services registered the largest shortfall of sh115.36 billion against the target of sh809.42 billion. The underperformance was mainly attributable to lower-than-target collections from VAT and excise duty.
VAT performance was affected by the composition of domestic economic activity and transactions subject to VAT.
Excise duty collections were affected by lower sales volumes of selected excisable products and the prevalence of illicit products, particularly in the alcoholic beverages market.
Taxes on incomes, profits and gains registered a shortfall of sh28.15 billion against the target of sh918.31 billion. The underperformance was mainly associated with lower-than-programmed collections from some direct tax categories, including corporate income tax, rental income tax, withholding taxes and other income-related taxes.
Other revenue (non-tax revenue) amounted to sh128.05 billion against the target of sh171.09 billion, resulting in a shortfall of sh43.04 billion. The underperformance was largely associated with lower-than-programmed collections from driver’s licences, passport fees, among others.