Uganda is set for a landmark financial year as the government unveils an ambitious Shs 84.209 trillion national budget for 2026/27, with the Uganda Revenue Authority (URA) expected to collect Shs 44.5 billion in taxes to support its initiatives. Minister of State for Finance, Planning, and Economic Development Henry Musasizi emphasized that the budget is designed to balance development projects with the welfare of public servants.
Fuel prices are poised to climb by Shs 200 per litre, a measure endorsed by National Resistance Movement (NRM) MPs during the party’s recent parliamentary caucus. Musasizi noted that the adjustment reflects the government’s need to manage rising global energy costs while sustaining public services.
A key feature of the budget is phased salary enhancements for primary school and arts teachers, with a projected cost of Shs 2.5 trillion. “We have implemented 25% of the planned salary increase this year. Gradual adjustments will continue until parity with science teachers is achieved,” Musasizi said, highlighting the government’s commitment to education sector equity.
Government Chief Whip Hamson Obua explained that the NRM caucus prioritized projects spanning peace initiatives, road and railway infrastructure, electricity expansion, and preparations for AFCON 2027. Additional focus areas include agricultural restocking programs in Teso, Lango, and Acholi regions, alongside salary improvements for teachers and security personnel.
Clarifying tax concerns, Musasizi dismissed rumors of a PAYE rate hike from 15% to 40%. Instead, the PAYE threshold will rise from Shs 235,000 to Shs 335,000, offering relief to low-income earners while ensuring those earning above Shs 10 million per month continue paying 40%. “Our aim is to ease the tax burden on lower earners, not increase it,” he stated.
Other public servants are also set to benefit from incremental salary boosts. Chief Administrative Officers, now earning Shs 12 million up from Shs 1.8 million, along with UPDF officers and assistant commissioners, will receive phased increases beginning January 2026, signaling a broader government push to reward performance across the civil service.
The budget framework illustrates a strategy that balances public sector incentives with national development priorities. Analysts note that the phased approach allows the government to gradually address wage disparities without jeopardizing fiscal stability.
As Uganda moves into the 2026/27 financial year, the government faces the dual challenge of stimulating economic growth while cushioning citizens from rising costs. The proposed measures reflect a carefully calibrated approach to development, public service equity, and economic resilience.
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