The government has set an ambitious target of increasing Uganda’s tax-to-GDP ratio from the current 14.2 percent to 20 percent by the 2029/30 financial year, a move aimed at significantly boosting domestic revenue collection and reducing reliance on borrowing and external financing.
The commitment was made during a high-level meeting between the Minister of Finance, Planning and Economic Development, Henry Musasizi, and the Uganda Revenue Authority (URA) Board and senior management, where both sides agreed on a roadmap to strengthen revenue mobilisation over the next four financial years.
Reaching a 20 percent tax-to-GDP ratio would mark one of the most significant improvements in Uganda’s tax performance in recent years and is expected to provide government with more resources to finance infrastructure, health, education, and other development priorities without increasing debt dependence.
Musasizi said government’s focus is not only to collect more taxes but also to ensure that all individuals and businesses with taxable income contribute fairly to national development.
He noted that the tax burden should not continue falling on a relatively small number of compliant taxpayers while many eligible individuals and businesses remain outside the tax net.
“The strategic direction of URA is aligned with government’s ambition of raising the tax-to-GDP ratio from the current 14.2 percent to 20 percent, and we are committed to working together to achieve this objective,” Musasizi said.
Expanding the tax base is expected to play a central role in achieving the target. Uganda continues to grapple with a large informal sector, where many businesses operate outside the tax system, limiting government revenue despite steady economic growth.
URA Commissioner General John Musinguzi described domestic revenue mobilisation as a shared national responsibility that requires collaboration across government institutions and the private sector.
He said improved taxpayer compliance, better visibility of economic activity, and stronger institutional support would help close the revenue gap and create more fiscal space for public services.
URA Board Chairman Emmanuel Katongole said achieving the target will also depend on stronger coordination between institutions.
He called for greater integration of data between URA and government ministries, departments and agencies to improve revenue assurance and identify taxpayers operating outside the formal system.
Katongole also proposed the establishment of a centralized Inland Container Depot (ICD) at Namanve to streamline cargo clearance, reduce trade costs, and minimise revenue leakages. He further urged government to review existing double taxation agreements, arguing that some limit Uganda’s ability to tax income generated within its jurisdiction.
State Minister for Investment and Privatisation, Evelyn Anite, urged URA to strengthen taxpayer education across the country to promote voluntary compliance and encourage business formalisation. She also called for integrity within the tax administration, warning that corruption undermines public confidence and weakens revenue collection efforts.
Economists have long argued that Uganda’s relatively low tax-to-GDP ratio limits its ability to finance development from domestic resources.
Raising it to 20 percent would bring Uganda closer to the average for emerging economies, although achieving the target will require sustained reforms, broader compliance, and expansion of the formal economy rather than increased pressure on already compliant taxpayers.