Business
Musasizi tasks URA to widen tax base as government pushes for higher revenue collections
Musasizi noted that many Ugandans earning taxable income remain outside the tax net, forcing compliant taxpayers and businesses to shoulder a disproportionate share of the country's tax obligations.
Finance Minister Henry Musasizi said paying tax should not be a burden to the few Ugandans who are tax compliant. (File photo)
By: Mary Karugaba, Journalist @New Vision
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Finance Minister Henry Musasizi has directed the Uganda Revenue Authority (URA) to intensify efforts to widen the country's tax base, saying that the burden of financing government programmes should not continue to rest on a small number of compliant taxpayers.
Meeting the Chairman of the URA Board, Emmanuel Katongole, and the tax body's senior management team led by Commissioner General John Musinguzi at the Ministry offices, Musasizi emphasised that expanding the tax base remains one of the most important avenues for achieving the target.
He noted that many Ugandans earning taxable income remain outside the tax net, forcing compliant taxpayers and businesses to shoulder a disproportionate share of the country's tax obligations.
"URA must put in place strategies to ensure that all Ugandans with taxable income pay their fair share of taxes," Musasizi said. "Paying tax should not be a burden to the few Ugandans who are tax compliant."
He noted that many Ugandans earning taxable income remain outside the tax net, forcing compliant taxpayers and businesses to shoulder a disproportionate share of the country's tax obligations.
"URA must put in place strategies to ensure that all Ugandans with taxable income pay their fair share of taxes," Musasizi said. "Paying tax should not be a burden to the few Ugandans who are tax compliant."
Musasizi said URA's strategic direction aligns with government's ambition of increasing Uganda's tax-to-GDP ratio from the current 14.2 per cent to 20 per cent in the coming years.
"The strategic direction of URA is consistent with government's ambition of raising the tax-to-GDP ratio, which now stands at only 14.2 per cent," Musasizi said. "I am ready to work with URA to ensure that the target of 20 per cent is achieved."
A statement from the ministry indicated that the meeting was called to review revenue enhancement measures for the period 2026/27 to 2029/30.
The discussions come at a time when government is seeking ways of increasing domestic revenue collections and reduce dependence on borrowing and donor funding to finance its development agenda.
In the 2026/27 budget financial year speech, Musasizi said domestic revenue collections are projected to increase from sh35.7 trillion in Financial Year 2025/26 to sh45.6 trillion in Financial Year 2026/27, equivalent to 15.9 percent of Gross Domestic Product (GDP).
He said during the financial year, the Government projects domestic revenue collections of sh45.96 trillion, up from sh35.7 trillion in 2025/26.
The projected collections, according to Musasizi, comprise sh40.16 trillion in tax revenue, sh4.02 trillion in non-tax revenue, sh1.44 trillion in petroleum revenue and sh339.8 billion in local government revenue.
The revenue will support a national budget of sh84.39 trillion, which will also be financed through domestic borrowing, debt refinancing and external financing.
“Increasing domestic revenue is not merely a fiscal objective; it is a sovereignty objective. A country that finances its development from its own resources enjoys greater policy independence, resilience and sustainability,” he said.
Speaking at the meeting, Katongole called for stronger collaboration between government institutions and URA, particularly through data sharing and integration.
He said linking databases across Ministries, Departments and Agencies (MDAs) would strengthen revenue assurance and help tax authorities identify individuals and businesses that are not meeting their tax obligations.
Katongole also advocated for the establishment of a centralised Internal Container Depot (ICD) at Namanve, saying it would facilitate trade while reducing costs, delays and revenue leakages.
"A centralised ICD at Namanve would effectively facilitate trade and minimise cost, delay and revenue risk," he said.
The URA board chairman further raised concerns about some of Uganda's double taxation agreements, arguing that they limit the country's ability to tax certain incomes and investments.
He called for a review of the agreements to safeguard Uganda's taxing rights and maximise revenue collections from cross-border economic activities.
Musinguzi said increasing domestic revenue requires collective effort from government institutions, businesses and citizens.
"Revenue mobilisation is a shared national responsibility," he said.
He added that through coordinated action, stronger tax compliance, improved visibility of economic activities and sustained government support, Uganda can generate sufficient resources to finance critical development priorities.
"With coordinated action, stronger compliance, better sector visibility and sustained government support, Uganda can close the revenue gap and finance its development priorities," Musinguzi said.
The meeting was also attended by the Minister of State for Privatisation and Investment, Aminah Mukalazi, who urged URA to strengthen taxpayer education across the country.
Mukalazi said many potential taxpayers remain unaware of their obligations and the benefits of formalising their businesses.
She called on the authority to intensify tax education campaigns, expand the tax base and promote formalisation of businesses, particularly among small and medium enterprises.
The minister also stressed the need to uphold integrity within the tax administration system.
She urged URA to ensure that its staff are not involved in corrupt practices that undermine public trust and affect revenue collection efforts.
"The strategic direction of URA is consistent with government's ambition of raising the tax-to-GDP ratio, which now stands at only 14.2 per cent," Musasizi said. "I am ready to work with URA to ensure that the target of 20 per cent is achieved."
A statement from the ministry indicated that the meeting was called to review revenue enhancement measures for the period 2026/27 to 2029/30.
The discussions come at a time when government is seeking ways of increasing domestic revenue collections and reduce dependence on borrowing and donor funding to finance its development agenda.
In the 2026/27 budget financial year speech, Musasizi said domestic revenue collections are projected to increase from sh35.7 trillion in Financial Year 2025/26 to sh45.6 trillion in Financial Year 2026/27, equivalent to 15.9 percent of Gross Domestic Product (GDP).
He said during the financial year, the Government projects domestic revenue collections of sh45.96 trillion, up from sh35.7 trillion in 2025/26.
The projected collections, according to Musasizi, comprise sh40.16 trillion in tax revenue, sh4.02 trillion in non-tax revenue, sh1.44 trillion in petroleum revenue and sh339.8 billion in local government revenue.
The revenue will support a national budget of sh84.39 trillion, which will also be financed through domestic borrowing, debt refinancing and external financing.
“Increasing domestic revenue is not merely a fiscal objective; it is a sovereignty objective. A country that finances its development from its own resources enjoys greater policy independence, resilience and sustainability,” he said.
Speaking at the meeting, Katongole called for stronger collaboration between government institutions and URA, particularly through data sharing and integration.
He said linking databases across Ministries, Departments and Agencies (MDAs) would strengthen revenue assurance and help tax authorities identify individuals and businesses that are not meeting their tax obligations.
Katongole also advocated for the establishment of a centralised Internal Container Depot (ICD) at Namanve, saying it would facilitate trade while reducing costs, delays and revenue leakages.
"A centralised ICD at Namanve would effectively facilitate trade and minimise cost, delay and revenue risk," he said.
The URA board chairman further raised concerns about some of Uganda's double taxation agreements, arguing that they limit the country's ability to tax certain incomes and investments.
He called for a review of the agreements to safeguard Uganda's taxing rights and maximise revenue collections from cross-border economic activities.
Musinguzi said increasing domestic revenue requires collective effort from government institutions, businesses and citizens.
"Revenue mobilisation is a shared national responsibility," he said.
He added that through coordinated action, stronger tax compliance, improved visibility of economic activities and sustained government support, Uganda can generate sufficient resources to finance critical development priorities.
"With coordinated action, stronger compliance, better sector visibility and sustained government support, Uganda can close the revenue gap and finance its development priorities," Musinguzi said.
The meeting was also attended by the Minister of State for Privatisation and Investment, Aminah Mukalazi, who urged URA to strengthen taxpayer education across the country.
Mukalazi said many potential taxpayers remain unaware of their obligations and the benefits of formalising their businesses.
She called on the authority to intensify tax education campaigns, expand the tax base and promote formalisation of businesses, particularly among small and medium enterprises.
The minister also stressed the need to uphold integrity within the tax administration system.
She urged URA to ensure that its staff are not involved in corrupt practices that undermine public trust and affect revenue collection efforts.