Tax Collection Becomes Harder When Ugandans Doubt Government Spending, Says URA

Revenue officials say taxpayers are increasingly questioning how their money is used, warning that public trust and accountability are becoming critical to Uganda's efforts to raise Shs40 trillion in taxes and finance its record Shs84.39 trillion budget.

KAMPALA — The Uganda Revenue Authority (URA) has acknowledged that public concerns over government spending are making tax collection more difficult, as taxpayers increasingly demand accountability for how their money is used before willingly complying with tax obligations.

Speaking during a post-budget dialogue in Kampala, URA Assistant Commissioner for Compliance Aggrey Kiziito said taxpayers have a legitimate expectation that government should spend public resources efficiently and deliver services that improve citizens' lives.

While taxation should not be viewed as a direct exchange where individuals expect personal benefits in return for every tax payment, Kiziito said government must demonstrate that revenues collected are being translated into tangible public goods and services.

“Government has a duty to provide public services and can only do that through mobilising revenue, and taxation is one of the key sources of revenue,” Kiziito said.

“So as Ugandans, it is our social responsibility to pay taxes. I want to thank those who have already done their duty and continue paying taxes compliantly and voluntarily.”

His remarks come as government begins implementing the Shs84.39 trillion budget for the 2026/27 financial year, the largest in Uganda's history, amid an aggressive push to increase domestic revenue mobilisation and reduce reliance on external financing.

Finance Minister Henry Musasizi last week unveiled the budget, which has grown from Shs72.37 trillion in the previous financial year. Government is targeting more than Shs45 trillion in domestic revenue, including roughly Shs40 trillion in tax collections, to finance the spending plan.

The budget is expected to fund priority investments in infrastructure, industrialisation, agriculture, healthcare, education, energy and security, while also positioning the country to benefit from anticipated commercial oil production. Government projects economic growth of more than 10 percent in the coming financial year.

However, Kiziito admitted that taxpayer confidence remains a major challenge.

He said URA officials frequently encounter resistance from citizens and businesses who question whether their tax contributions are being used effectively, particularly amid recurring public concerns about corruption, wastage and inefficiencies in government expenditure.

“We take our very hard operations in some of our taxpayers resulting from the indiscretion of the expenditure side,” he said.

“When our taxpayers ask us for money, the question they ask is, ‘What is my money going to do?’”

The comments reflect a growing debate around the relationship between taxation and accountability in Uganda, where government is under increasing pressure to expand revenue collection while demonstrating value for money in public spending.

Kiziito welcomed government's renewed emphasis on expenditure efficiency and accountability, arguing that greater transparency would strengthen public confidence and improve voluntary tax compliance.

“Once government puts emphasis on the expenditure side, efficiency and accountability, Ugandans will be much more willing to contribute even more,” he said.

The concern comes at a time when public debt obligations are consuming a significant share of government resources. The 2026/27 budget allocates approximately Shs33.4 trillion to debt servicing, making it the single largest expenditure item and raising questions about the fiscal space available for service delivery and development projects.

Uganda's persistent tax challenge

Uganda continues to grapple with one of the lowest tax-to-GDP ratios in the region.

Current estimates place the country's tax-to-GDP ratio at between 13 and 14 percent, well below the East African Community target of 20 percent and lower than the Sub-Saharan African average.

Economists attribute the gap to Uganda's large informal economy, widespread subsistence agriculture, low household incomes and persistent tax evasion among some businesses and high-income earners.

Although URA has consistently improved revenue performance in recent years and frequently exceeded annual collection targets, experts argue that long-term sustainability will depend on broadening the tax base rather than increasing the burden on already compliant taxpayers.

To address the challenge, government has intensified efforts to digitise tax administration, expand the taxpayer register, improve compliance monitoring and formalise sectors of the economy that have historically remained outside the tax net.

Kiziito said achieving Uganda's long-term development ambitions would require both taxpayers and government to fulfil their respective responsibilities.

He argued that citizens must contribute through taxes, while government must ensure that resources are spent prudently and transparently.

“The country cannot develop and move out of low-income status unless we make a contribution and government spends the resources well,” he said.

As implementation of the 2026/27 budget gets underway, government's success in meeting its ambitious revenue targets may depend not only on stronger enforcement by URA, but also on its ability to convince taxpayers that every shilling collected is delivering measurable value to the people who pay it.

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