Henry Musasizi, Uganda’s Minister of State for FinanceThe Uganda Revenue Authority (URA) has been given a task to collect over UGX40Trn to finance the UGX69.399Trn 2026/27 national budget.The rest of the funds will be raised through borrowing.The details are contained in the National Budget Framework Paper for FY2026/27 that was tabled before Parliament during the 16th December 2025 plenary sitting, by the Minister of State for Finance, Henry Musasizi in which he provided a breakdown on how Government will finance its ambitious plan.“In FY 2026/27, domestic revenues are projected to amount to UGX40.090 trillion, from an estimate of UGX37.227 trillion in FY 2025/26. This translates into nominal growth in revenues of UGX2.863Trn. This rise is attributed to gains on account of higher economic growth, a widening tax base, improved administrative tax revenue collection measures, as well as reforms in non-tax revenue collection,” Musasizi stated.He added: “Over the medium term, domestic revenues will increase significantly, driven by continued growth in line with the Tenfold Growth Strategy, the introduction of new tax policy measures, enhanced tax administration, higher tax compliance, greater accountability for tax holidays, the elimination of non-beneficial exemptions that do not support the industrialisation agenda, and increased revenues from the oil and gas sector as the country begins production.”Government also revealed plans to seek funding from external market whose borrowing is projected at UGX4.044Trn in FY 2026/27, a decline from UGX5.679Trn in the approved Budget for FY 2025/26, while the total project loans are estimated at UGX8.877Trn, of which UGX2.949Trn will be attained under concessional terms.Additionally, Government also intends to knock on doors of several commercial banks in Uganda to borrow UGX8.953Trn in FY 2026/27, which is a decline from UGX11.381Trn in FY 2025/26, a trend that the Ministry of Finance says will continue declining over the medium term to ensure fiscal and debt sustainability.“This reduction reflects Government’s intention to avoid crowding out of the private sector, curb the rising debt-to-GDP ratio, and address the growing burden of interest payments relative to revenues. It also follows the phasing out of certain one-off expenditures. By June 2025, the debt-to-GDP ratio had reached 51 percent, exceeding the 50 percent ceiling set in the Charter for Fiscal Responsibility,” he said.The Ministry of Finance raised concern about the cost of debt repayments in Uganda, pointing out that external debt repayments (amortisation) are projected to amount to UGX4.833Trn in FY 2026/27, compared to UGX4.986Trn in the approved Budget for FY 2025/26 and the increasing cost of debt repayment is projected to increase over the medium term, owing to the existing debt payment profile.“At the same time, the cost of debt has risen sharply. Interest payments already accounted for 26.2 percent of revenues in FY 2024/25, and this is projected to climb to 30.2 percent by FY2026/27. To put this in perspective, sub-Saharan Africa’s median interest-to-revenue ratio is just 12 percent. Such elevated debt service burdens shrink fiscal space, leaving fewer resources available for discretionary spending in high-multiplier, growth enhancing sectors. Going forward, Government’s financing strategy is to reduce borrowing on commercial terms and focus more on concessional borrowing,” Musasizi said.When it comes to interest payments on Uganda’s debt, the Ministry of Finance projected this to amount to UGX12.735Trn and of this, UGX10.716Trn is projected for domestic interest payments while the remaining amount, equivalent to UGX2.019Trn will be foreign interest payments and commitment fees. Over the medium term, interest payments are projected to average 4.2 percent of GDP. During the tabling of the National Budget Framework Paper, Minister Musasizi also provided an update on Uganda’s debt portfolio indicating that as of end June 2025, Uganda’s total public debt stock stood at UGX116.2Trn, an increase from UGX94.7Trn a year earlier, with the increase mainly coming from borrowing taken to finance major infrastructure such as energy projects, roads, industrial parks, and the expansion of Entebbe International Airport.The Minister stated: “Public debt remains manageable with moderate risk of distress as we expect sustainability to strengthen over the medium to long term. This will be driven by faster GDP growth under the Tenfold Growth Strategy, increased domestic revenue mobilisation, tighter control of spending, and expected oil revenues.”It is worth noting that the preliminary projected Resource Envelope for FY 2026/27 amounts to UGX69.399Trn, which has reduced by UGX2.977Trn from UGX72.376Trn trillion of the current FY 2025/26, and key of the highlights is the reduction in donor funds by UGX1.753Trn from UGX2.084Trn to UGX331Bn.However, revenue shortfalls have been common in the current Financial Year.The Ministry of Finance has revealed that cumulatively this financial year (up to November 2025), domestic revenue collections have amounted to UGX12.774Trn, a 95% performance rate against the UGX13.448Trn cumulative target. The post URA Tasked To Collect UGX40Trn In Revenue In 2026/27 On “Higher Economic Growth, Widening Tax Base” appeared first on Business Focus.