Uganda’s 2026/27 National Budget: Key Highlights and Financial Projections
The Uganda Revenue Authority (URA) is projected to collect Shs 44.5 billion in taxes to support the proposed national budget for the 2026/27 financial year, which totals Shs 84.209 trillion. This significant figure underscores the government’s commitment to funding various developmental and social initiatives across the country.
In addition to tax collection, fuel prices are expected to increase by Shs 200 per litre. This decision was endorsed by members of the National Resistance Movement (NRM) during their recent Parliamentary Caucus meeting. The move is part of a broader strategy to manage public finances while addressing rising operational costs.
Salary Enhancements for Educators
One of the key components of the budget is the phased salary enhancement for arts and primary school teachers. The government has allocated Shs 2.5 trillion for this initiative, with 25% already provided in the current financial year. The plan involves gradually increasing salaries until they reach parity with other science teachers. This step aims to address long-standing disparities in the education sector and improve teacher retention and morale.
Government Chief Whip, Hamson Obua, emphasized that the NRM caucus prioritized the FY 2026/27 budget, focusing on several critical areas:
- Peace initiatives: Ensuring stability and security across the nation.
- Infrastructure development: Expanding road networks, improving electricity access, and advancing railway projects.
- Sports and events: Preparing for the AFCON 2027 tournament, which will bring international attention and economic opportunities.
- Regional development: Restocking efforts in the Teso, Lango, and Acholi regions to boost agricultural productivity and local economies.
- Salary enhancements: Providing increased compensation for primary school teachers, secondary arts teachers, and security personnel.
Tax Policy Adjustments
Minister of State for Finance, Planning and Economic Development, Henry Musasizi, clarified recent changes to the Pay-As-You-Earn (PAYE) tax system. Reports suggesting an increase in the tax rate from 15% to 40% were dismissed. Instead, the PAYE threshold will be raised from Shs 235,000 to Shs 335,000, effectively exempting individuals earning below this amount from paying income tax.
“We are not increasing taxes; rather, we are favoring those who earn little,” Musasizi stated. He added that high earners, specifically those earning above Shs 10 million per month, will continue to pay the 40% tax rate. This adjustment is intended to provide relief to low-income earners while maintaining revenue from higher-income brackets.
Salary Increases for Public Servants
In addition to the salary enhancements for educators, other public servants will also see gradual increases starting in January 2026. These include:
- Chief Administrative Officers (CAOs), who currently earn Shs 12 million, up from Shs 1.8 million.
- UPDF officers (Uganda People’s Defence Forces).
- Assistant commissioners, who will receive incremental salary adjustments.
These changes reflect the government’s effort to align public service compensation with inflation and cost-of-living increases, ensuring that essential workers are fairly rewarded for their contributions.
Conclusion
The 2026/27 national budget represents a comprehensive approach to managing Uganda’s economy and addressing pressing social and infrastructural needs. With a focus on tax reforms, salary adjustments, and regional development, the government aims to foster inclusive growth and stability. As these policies take effect, their impact on citizens and the broader economy will be closely monitored.
