Kampala, Uganda: The government of Uganda on Thursday unveiled a Shs72.136 trillion national budget for the Financial Year 2025/26, with Security, Health, and Education receiving the largest allocations.
Of the total budget, Shs37.2 trillion, about 60% is expected to be raised through domestic revenue, while the rest will come from loans and grants. The fiscal deficit is projected at 7.6% of GDP, which the government plans to manage through tax base expansion, digital revenue tracking, and curbing corruption at the Uganda Revenue Authority (URA).
Key Sector Allocations
Security – Shs9.9 Trillion:
Security agencies received the biggest allocation, aimed at strengthening law enforcement, professionalising the armed forces, and supporting the 2026 general elections.
Part of the funds will also go towards constructing more courts and expanding the use of technology in judicial processes. Shs602.7 billion has been earmarked to improve access to justice, including investments in alternative dispute resolution.
Health – Shs5.87 Trillion
The health sector received the second-highest allocation. Funds will be used to operationalise Health Centre IVs, roll out e-health systems, expand digital medical services, and improve emergency care with CT scanners, digital X-ray machines, and a national ambulance service.
Education – Shs5.04 Trillion
Funds will support Universal Primary and Secondary Education, the student loan scheme, construction of new seed schools, digital school inspections, and teacher recruitment. The government will also operationalise Bunyoro and Busoga universities.
Wealth Creation – Shs2.43 Trillion
This year’s budget places heavy focus on monetising the economy by empowering communities through the Parish Development Model (PDM), Emyooga programme, and the Uganda Development Bank. Each parish will receive Shs100 million, disbursed via digital platforms like WENDI and ZAIDI. Over 2.6 million Ugandans have already benefited through agriculture, livestock, and small-scale businesses.
Agro-Industrialisation – Shs1.86 Trillion
The agriculture and industrialisation sectors will receive a major boost through 145 completed solar-powered irrigation schemes and another 157 under construction. Shs50 billion has been added to the Agricultural Credit Facility, bringing it to Shs1 trillion.
Energy, Oil & Gas – Shs875.8 Billion
Uganda is banking on oil revenues starting in 2026, with the East African Crude Oil Pipeline now 58% complete. A deal has also been signed to construct a 60,000-barrel-per-day oil refinery. Projected annual earnings stand between US$1–2.5 billion.
Tourism – Shs430 Billion + Infrastructure
Tourism continues to grow, with Uganda ranking 7th in Africa for Meetings, Incentives, Conferences, and Exhibitions (MICE) tourism. Earnings hit US$1.52 billion, aided by infrastructure investments worth Shs2.2 trillion in roads, ICT, and security.
Coffee & Export Boost
Uganda’s coffee exports jumped from US$1 billion to US$1.83 billion in one year. Finance Minister Matia Kasaija urged value addition before export to improve job creation and national income.
Tax Reforms and Exemptions
To support business growth and formalisation, the government introduced several tax incentives among which include; A three-year income tax holiday for Ugandan start-ups established after July 1, 2025, Capital gains tax exemption on asset transfers to companies fully owned by the individual, A one-year income tax waiver for Bujagali Energy Limited, Stamp duty scrapped on mortgages and financial agreements and Penalties and interest waived for taxpayers who clear principal tax arrears by June 30, 2026.
To strengthen tax enforcement, EFRIS non-compliance now attracts a penalty twice the tax owed.
In the alcohol sector, excise duties on locally malted beer have been streamlined. The 30% or Shs950-per-litre tax on beer made from local barley was scrapped. Beer made with 75% local raw materials will now be taxed at 30% or Shs900 per litre.
On imports, duties on textiles have been revised downward, where Fabrics: reduced to $2/kg or 35%, from $3/kg and Garments: reduced to $2.5/kg or 35%, from $3.5/kg. These measures, according to the Minister, aim to boost competitiveness in the local textile industry.
Economic Outlook
Kasaija also projected Uganda’s economy to grow at 7% in FY2025/26, with GDP per capita rising to US$1,324, edging Uganda closer to middle-income status.
If you would like your article/opinion to be published on Uganda’s most authoritative news platform, send your submission on: [email protected]. You can also follow DailyExpress on WhatsApp and on Twitter (X) for realtime updates.
