The government has unveiled Uganda’s Shs84.39 trillion budget for the 2026/27 financial year, the biggest in the country’s history. While the figure sounds huge, many Ugandans are wondering what it actually means for their daily lives.
A large portion of the money will come from within Uganda. The government expects to collect about Shs45.96 trillion, with taxes contributing Shs40.16 trillion. The remaining funds will come from borrowing, partnerships with private investors, and other financing arrangements.
The budget prioritises development projects, with Shs22.05 trillion set aside for roads, energy, industrial parks, water projects and other infrastructure aimed at supporting economic growth. Another Shs9.71 trillion will go towards paying salaries for public servants such as teachers, health workers, security personnel and other government employees.
To increase government revenue, Parliament approved several new tax measures that will affect both consumers and businesses. Alcohol drinkers are among those who will feel the impact most. Excise duty on spirits and alcoholic beverages, including Uganda Waragi, Black Label, cognac and Amarula, has more than doubled from Shs1,700 to Shs3,500 per litre. The government expects this change to bring in an additional Shs85 billion.
The new tax measures could also lead to higher prices for a number of commonly used products and services. Items such as fuel, cement, sugar, cooking oil, paint, plastics and motorcycles may become more expensive as businesses pass on increased costs to consumers.
However, the budget also contains some relief measures. Workers earning lower incomes will take home more money after the Pay As You Earn (PAYE) tax-free threshold was increased from Shs235,000 to Shs335,000 per month. This means people earning up to Shs335,000 monthly will no longer pay PAYE tax.
Small businesses have also received a boost. The annual turnover threshold for VAT registration has been raised from Shs150 million to Shs300 million. This means many small and medium-sized businesses will no longer be required to register for VAT, reducing their compliance costs and paperwork.
The government is also offering incentives to attract investment. Developers who build ultra-luxury tourism facilities will enjoy a tax holiday, a move intended to attract high-end tourists and strengthen Uganda’s tourism sector. In addition, the income tax exemption for Bujagali Energy has been extended to help keep electricity tariffs affordable.
Finance Minister Henry Musasizi said the government will focus on spending money more efficiently by directing resources towards high-impact projects under the Agro-Industrialisation, Tourism, Minerals, and Science, Technology and Innovation (ATMS) strategy, while reducing wasteful expenditure.
For the ordinary Ugandan, the new budget presents a mixed picture. Some people will benefit from tax relief and increased investment in development projects, while others may face higher prices for goods and services due to new taxes. Ultimately, the success of the budget will depend on whether government spending translates into more jobs, better services and improved living standards for citizens.
