In a fiscal climate where many economies are gasping under debt and tax collection fatigue, Uganda Revenue Authority (URA) has pulled off a remarkable feat.
It has beaten its revenue target for the 2024/25 financial year by Shs174.11 billion, collecting Shs31.54 trillion—a 100.54% performance.
The numbers tell a story of discipline, economic recovery, and a pivot towards digital administration.
They also tell a story of how domestic resilience and global trade are the twin engines of Uganda’s fiscal base.
But as URA basks in the moment, the real challenge is scaling the mountain of UGX36.74 trillion in the 2025/26 financial year, a 17.1% jump.
The mainstay of the surplus
Domestic revenue stood tall, contributing UGX21.24 trillion, exceeding the target by UGX123.5 billion
This was a year-on-year growth of 15.54%, a performance many tax agencies would envy.
But where exactly did the money come from?
Pay As You Earn, which contributed UGX5.37 trillion was the top performer, suggesting formal job recovery.
Value Added Tax came second with a UGX5.05 trillion contribution, followed by Corporate Tax (UGX3.26 trillion).
Rental Income Tax followed with a UGX331 billion – still modest, indicating that the real estate sector remains under-taxed or under-declared.
Presumptive Tax then followed with a UGX22.4 billion contribution, almost negligible, underlining the challenge of taxing the informal sector.
URA Commissioner General John Musinguzi, acknowledged that enforcement of EFRIS and digital tax stamps played a role by tracking transactions digitally.
This is something that is allowing URA to slowly gain ground on a notoriously slippery segment: SMEs and retail trade.
Riding the global recovery
On the customs front, URA collected Shs11.1 trillion, narrowly beating the Shs11.05 trillion target.
But what’s impressive is the 16.24% year-on-year growth. That’s not a minor bump—it’s a bounce.
Petroleum Duty led with UGX3.8 trillion, followed by VAT on imports at UGX3.73 trillion, accounting for nearly two-thirds of all customs revenue.
Import Duty contributed UGX2.49 trillion, indicating rising imports, either due to consumer demand or inputs for local production.
But such growth raises the question: Is Uganda importing too much? The balance between promoting local manufacturing and encouraging trade remains delicate.
The five-year trajectory
URA’s performance marks a comeback from the slower growth of the 2023/24 financial year.
The average five-year trend shows resilience—an upward curve despite shocks.
The 2024/25 financial year’s performance was buttressed by a 6.7 percent GDP growth mid-year, driven by services and industry.
Ugandan enterprises urged to explore regional oil and gas opportunitiesThis signals a structural shift in the economy—less reliance on agriculture, more on value-addition and urban demand.
Shs36.74 trillion and the tech gambit
To reach the new target, URA must mobilize UGX5.37 trillion more than last fiscal year.
That’s the equivalent of another entire year’s worth of customs collections.
Musinguzi says this will be achieved through “strengthening tax administration and compliance, increased workforce, stakeholder engagements, and improved staff accountability.”
But what stands out are URA’s planned digital innovations and investigative enhancements.
URA says it will focus on the implementation of digital stamps and EFRIS, enhancing the use of data analytics, AI, and risk management to identify potential taxpayers, and revenue leakages.”
This shift toward data science and AI-driven enforcement signals a move from reactive to predictive tax administration.
URA also plans to “use alternative dispute resolution” to unlock billions tied up in tax litigation to improve cash flow for government and businesses.
Meanwhile, the strategy includes “strengthening science investigations and border management,” a response to ongoing smuggling and fraud concerns.
These measures point to a future where tax enforcement is smarter, faster, and increasingly digital.
The elephant in the room – corruption and informality
Yet, beneath the glow of a record-breaking surplus, structural challenges persist.
As Musinguzi rightly acknowledged, meeting future targets “will require concerted effort from all stakeholders involved in revenue collection.”
Among these efforts, the elephant in the room remains corruption and informality.
While URA has committed to “ensuring zero tolerance to corruption,” the practical reality is more complex.
Entrenched interests, administrative bottlenecks, and low-risk detection capacity have made anti-corruption enforcement an uphill battle.
At the same time, Uganda’s massive informal economy continues to elude the tax net.
Millions of entrepreneurs, traders, and service providers operate beyond the reach of formal systems.
The implication? The challenge ahead is no longer just tax collection.
It’s tax inclusion, which signals that Uganda needs tax expansion, built on digital integration, taxpayer education, and enforcement equity.
This will sustain URA’s fiscal momentum without overburdening the already compliant few.
If URA can pull it off again—sustainably—it won’t just be a tax collector. It will be a development enabler.
