The Minister of State for Finance, Henry Musasizi has revealed that in 2026/27, the Uganda Revenue Authority (URA) is expected to collect taxes to a tune UGX44.5 Billion, in order to fund the UGX84.209 Trillion budget and Ugandans should expect a hike in the price of fuel, after the NRM MPs backed the proposal to increase UGX200 per litre of fuel.
He made the revelation on Friday while addressing the media at Parliament, after the National Resistance Movement (NRM) Parliamentary Caucus, where it was also revealed that arts and primary school teachers are expected to receive salary enhancement in a phased manner, a move that will cost taxpayers UGX2.5 Trillion.
“The draft budget estimates which we shall present to Parliament on Wednesday next week contain a total resource envelope of UGX84.209 Trillion, out of which, the tax revenue is UGX44.5 Billion, and also to note is that in the resource envelope there is a movement from UGX72.76 Trillion of FY 2025/2026 to now UGX84.206 Trillion, this is about UGX11.6 Trillion,” Minister Musasizi said.
According to Hamson Obua, Government Chief Whip, the NRM caucus discussed a range of topics and top of the agenda were the budget priorities for the Financial Year 2026/2027 where the NRM MPs agreed to support the budget priorities covering peace, roads, electricity, railway, AFCON 2027, scientific innovation, restocking Teso, Lango Acholi, salary enhancement for primary school teachers, secondary school arts teachers, and security personnel.
When asked by journalists to clarify on media reports about harmonisation of salaries of the arts and science teachers, Minister Musasizi confirmed the development, although he said that the enhancement will be done in a phased manner.
“Yes, but in a phased manner. This financial year we have provided 25%. We will be providing 25%, 25% until when we get to the level where other science teachers are,” Minister Musasizi shared.
He added “And also, in the primary category we are providing 25%. We want to increase their salary to 100% but we want to achieve this in four years because the total is about UGX2.5 Trillion and now we have been able to provide UGX550 Billion”.
The Minister also revealed that there will be salary enhancement for other public servants, with Chief Administrative Officers, UPDF officers and assistant commissioners to be among the category that will be smiling their way to the banks, come January 2027.
“We have been gradually enhancing salaries of other staff, Government have been enhanced, the assistant commissioners have been enhanced, and next year we are going to enhance the principals, and the other year we shall go to the officers until when we get to the lowest level,” Musasizi said.
“And when I mention commissioners, even the chief administrative officers in districts are at the level of commissioners. They are now earning UGX12 Million. They have moved from the previous UGX1.8 Million to now UGX12 Million.”
Minister Musasizi also clarified that unlike media reports that had earlier indicated that the Pay As You Earn (PAYE) rate was slated to increase from 15% to 40%, he described these reports as false but instead said that the new proposals on PAYE are instead going to cost Government UGX96 Billion after the threshold is increased from UGX235,000 that is the current band for anyone to pay PAYE to now UGX335,000, since those earning below UGX335,000 won’t pay PAYE.
“The thresholds have been, the lowest category has been UGX235,000, that is where we have been starting from. Now we are proposing to start from UGX335,000, in other words, we have exempted all those people who earn below UGX335,000, those are now going to be exempted. So the lowest individual category, those who pay tax will begin from UGX335,000 and above,” Musasizi said.
Minister Musasizi detailed that in the current PAYE band of the highest individual category, those who earn more than UGX120Million per year or more than UGX10Million per month, these individuals are charged at the rate of 40% and those that earn UGX10Million and below will be taxed at normal.
“Therefore, instead of saying that we have increased the tax, instead we have favoured those who have been earning. Like now, if you have been earning your UGX300,000 and you have been paying pay as you earn, now you are exempt. You will not be paying PAYE,” Musasizi told journalists at Parliament.
He added “So, there is nothing, instead, we are losing. We are going to lose UGX96Bn as a result of this proposal we have introduced. It is mainly to favour those who earn little from paying taxes. Those who have been earning above UGX10 million have been paying 40%. This is what I pay as a member of parliament because my salary is above UGX10 million.”
