The Ministry of Finance released its monthly report on the economy for November, revealing that domestic revenue collections amounted to Shs2.131 trillion. However, the government missed its revenue target by Shs120 billion due to shortfalls in taxes on international trade transactions and indirect domestic taxes.
According to the Macroeconomic Policy Department in the Finance ministry, tax revenue collections were Shs1.938 trillion, falling short of the Shs2.065 trillion target by Shs127.45 billion. The shortfall was mainly attributed to international trade transactions, with a total of Shs797.92 billion collected against a target of Shs910.59 billion.
Indirect domestic tax collections totaled Shs476.45 billion, missing the target of Shs531.09 billion. On a positive note, direct domestic taxes exceeded the target, registering a surplus of Shs41.91 billion.
The government’s spending in November amounted to Shs3.378 trillion, exceeding the programmed expenditure of Shs3.197 trillion. Recurrent expenditure was 6.1 percent higher than initially planned, following a supplementary budget approved in quarter two. Development spending also surpassed expectations by 14.8 percent, primarily directed towards supporting the private sector and vulnerable households.
Despite the revenue challenges, economic activity in Uganda showed signs of improvement. The Composite Index of Economic Activity increased by 0.65 percent from September to October. The Purchasing Managers’ Index (PMI) rose from 52.4 in October to 53.4 in November, indicating sustained improvement in business conditions.
However, the Business Tendency Index (BTI) showed a slight reduction in optimism, decreasing from 59.59 in October to 58.48 in November. Permanent Secretary Ramathan Ggoobi highlighted the issue of low tax revenues, stating that Uganda is collecting only 14 percent of GDP, below the 18 percent average for peer countries.
