By Aggrey Baba
In a show of continued focus on national stability, service delivery, and economic transformation, the government on Thursday unveiled a UGX 72.1 trillion national budget for the 2025/26 financial year, with the lion’s share going to Security, Health, and Education.
The national budget, read by Finance Minister Matia Kasaija at the Kololo Ceremonial Grounds, is the country’s biggest yet, and reflects an attempt to keep pace with inflation, security pressures, public expectations, and a fast-approaching general election.
According to the government, UGX 37.2 trillion (just over half of the budget) is expected to be collected from domestic revenue, with the rest plugged by loans and grants. Authorities have promised tighter controls at Uganda Revenue Authority (URA), expansion of the tax net, and digital tools to curb revenue loopholes.
Security once again took the biggest chunk at UGX 9.9 trillion, with the government saying this money will go towards equipping and professionalizing the armed forces, strengthening law enforcement, and maintaining stability ahead of the 2026 polls.
A portion will be used to construct more courts and integrate digital solutions in the justice sector. About UGX 602.7 billion has been set aside specifically for improving access to justice.
Health came in second with UGX 5.87 trillion, focused at expanding medical services across the country through digital systems, upgrading emergency care facilities with CT scanners and X-ray machines, and operationalizing more Health Centre IVs, with a national ambulance network, also in the works to boost emergency response.
The Education sector will receive UGX 5.04 trillion, with the government banking on technology and infrastructure to close persistent gaps.
New seed schools will be constructed, more teachers recruited, and digital inspection rolled out to monitor learning. In addition, Bunyoro and Busoga universities are expected to be fully operational in the coming year.
Away from the big three, the budget also prioritizes wealth creation, with UGX 2.43 trillion earmarked for the Parish Development Model (PDM), Emyooga, and the Uganda Development Bank.
Each parish is to receive UGX 100 million, disbursed through digital systems like WENDI and ZAIDI. Over 2.6 million people have reportedly benefited through agriculture and small-scale enterprises.
In support of agro-industrialization, UGX1.86 trillion has been allocated, with the government highlighting 145 completed solar-powered irrigation schemes and another 157 under development.
The Agricultural Credit Facility has been boosted by UGX 50 billion, raising its capital to UGX 1 trillion, aimed at easing financing for farmers and agro-processors.
With the countdown to oil production underway, UGX 875.8 billion has been directed to the Energy, Oil, and Gas sector.
Government says the East African Crude Oil Pipeline (EACOP) is 58% complete, while a deal has been sealed for a 60,000-barrel-per-day refinery, with annual earnings projected to fall between USD 1 billion and 2.5 billion.
Tourism continues to pick up pace, supported by UGX 430 billion in direct sectoral funding and an additional UGX 2.2 trillion in roads, ICT, and security infrastructure.
The pearl of Africa is now ranked 7th in Africa for MICE (Meetings, Incentives, Conferences, and Exhibitions), with tourism revenues hitting USD 1.52 billion.
Coffee exports, a major foreign exchange earner, registered strong performance, growing from USD 1 billion to 1.83 billion within one year. Kasaija encouraged farmers and exporters to invest in value addition, saying it’s the only way Uganda will realize job creation and increased household incomes.
The tax policy for FY2025/26 has also been adjusted in favour of enterprise growth and sectoral competitiveness. Among the notable measures is a three-year income tax holiday for Ugandan start-ups formed after July 1, 2025, and exemptions for capital gains on asset transfers to companies wholly owned by the transferring individual.
A one-year income tax waiver has been extended to Bujagali Energy Limited, while stamp duty has been removed on mortgages and financial agreements to stimulate the financial sector.
Taxpayers who clear their outstanding principal taxes before June 30, 2026, will have penalties and interest waived.
The URA is also expected to enforce tougher compliance through EFRIS, with defaulters now facing a fine double the unpaid tax.
In support of local industries, the excise duty on beer brewed from locally sourced barley has been streamlined, with the former UGX 950-per-litre rate being scrapped in favour of a new UGX 900 per-liter charge, as long as the beer is made from 75% local raw material.
This, the government says, is part of its wider effort to support domestic agro-processing and job creation.
In the textile sector, duties on imports have been revised downward to support the struggling local garment industry. Taxes on fabrics have been cut to USD 2/kg down from USD 3/kg, while garment taxes have dropped from USD 3.5/kg to USD 2.5/kg.
Minister Kasaija expressed confidence in the country’s direction, projecting 7% economic growth for the coming financial year. With GDP per capita expected to rise to USD 1,324, the government says Uganda is inching closer to attaining lower-middle income status.
As always, the success of the budget will depend not only on policy but also on implementation, and as the country heads into a politically charged season, many will be watching not just how much is spent, but how well it is spent. (For comments on this story, get back to us on 0705579994 [WhatsApp line], 0779411734 & 041 4674611 or email us at mulengeranews@gmail.com).
