On paper, it reads like a show of bravado. Uganda is looking to achieve fiscal independence that can wean it off external support that comes laced with tough conditions after the revenue tax body was recently charged with the duty to collect more money from everyone eligible.
The ministry of Finance, Planning and Economic Development and the Uganda Revenue Authority (URA) have agreed to raise Uganda’s tax-to-GDP ratio from the current 14.2 per cent to 20 per cent by the 2029/30 financial year.
The ministry designs the tax structure, while the URA enforces it. Henry Musasizi, the new minister of Finance, in his first high-level strategy meeting as minister, said the target aligns with government’s ambition of transforming Uganda’s economy.
Uganda, a largely agro-based economy where at least six out of 10 people draw a living, is seeking to turn into a middle-income country through an array of industries, such as manufacturing and mineral development.
Strip away Musasizi’s confidence, however, and the numbers reveal what a pipe dream this plan is. Between the 2021/22 and 2024/25 financial years, Uganda’s gross tax-to-GDP ratio inched up by just 0.72 percentage points over three years.
To hit 20 per cent by 2029/30, the country now needs to add 5.8 percentage points in four years – more than eight times the pace of improvement managed over the last three. Few countries anywhere have pulled off that kind of growth without deep structural reform, a growth boom, or sweeping policy change, some of which have to be painful and choke many people’s wallets.
Even before URA officials goes knocking on people’s doors looking for money, the shape of Uganda’s economy presents the first major challenge. Uganda now has more registered taxpayers than ever – the count grew from roughly 4.5 million in 2025 to 5.25 million by early 2026 – and yet the Auditor General has flagged that this represents only about a fifth of Ugandans who ought to be paying tax.
However, roughly 1,000 taxpayers are estimated to contribute around 80 per cent of all tax collected, according to the Auditor General.
“…it is clear that Uganda has continued to perform relatively poorly compared to other countries in the region and globally. The tax base has not widened or deepened enough to tax all potential sources, resulting in debt dependency to bridge the financing gap,” according to the Auditor General’s annual report for the year ended December 2025.
Government officials say they are determined to turn around this situation. In a statement from the meeting, which was held at the ministry of Finance’s offices, Musasizi said “URA must put in place strategies to ensure that all Ugandans with taxable income pay their fair share of taxes,” adding that “paying tax should not be a burden to the few Ugandans who are tax compliant.”
Previous finance ministers have echoed the same message, and most of them have left the job without achieving that goal. Musasizi is determined not to be part of those statistics. URA has found a way of netting more Ugandans into its tax bracket.
The revenue body has linked the tax identification number to many transactions, such as the sale of land or any other assets, in order to be able to net more people. Businesses and their directors are all expected to have a clean tax sheet if they want a certificate to transact.
Emmanuel Katongole, the chairman of the board of URA, called for “data integration between ministries, departments and agencies (MDAs) and URA for revenue assurance, a centralized internal container depot (ICD) at Namanve to effectively facilitate trade and minimize cost, delay and revenue risk.”
He also highlighted the need to review the double taxation agreements, which limit Uganda’s taxing rights. Registering taxpayers, it turns out, is the easy part. Turning them into taxpayers who actually generate revenue is another matter.
Many newly registered businesses stay dormant. Others sit below taxable thresholds, operate in sectors with irregular or hard-to-verify incomes, or simply remain in the informal economy despite holding a Tax Identification Numbers.
Then there are others who issue invoices but never receive payment from defaulting clients, and yet the URA only sees a finished transaction. Add this all up and what you see is a tax register that has swollen impressively while the effective, revenue-generating base has grown only marginally.
What this does is that it forces the URA to heap the burden of tax revenue generation on that small number of taxpayers. John Musinguzi, the URA Commissioner General, made a rallying call to Ugandans, saying “revenue mobilization is a shared national responsibility,” adding that with coordinated action, stronger compliance, better sector visibility and sustained government support, Uganda can close the revenue gap and finance its development priorities.
