Uganda recorded a fiscal surplus of Shs951.59 billion in December 2025, falling well below the planned surplus of Shs1,720.4 billion for the month, according to preliminary figures released by the Ministry of Finance, Planning and Economic Development.
The figures are contained in the Performance of the Economy Report for December 2025, issued by the Ministry of Finance, which shows that weaker-than-anticipated revenue inflows combined with higher government spending narrowed the surplus.
Total revenue and grants collected in December amounted to Shs4,085.10 billion, missing the monthly target of Shs4,480.83 billion by Shs395.73 billion. Domestic revenue contributed Shs3,924.70 billion, while external grants totalled Shs160.40 billion. Of the grants received, Shs106.8 billion was project support, while Shs53.6 billion was provided as budget support, including funding under the Intergovernmental Fiscal Transfers Programme.
Domestic revenue collection stood at 91.3 percent of the target. Tax revenue reached Shs3,788.59 billion, with shortfalls registered across major tax categories. Non-tax revenue performed even lower, amounting to Shs136.11 billion, which was Shs80.67 billion below the planned level.
“The shortfalls were mainly due to delays in the remittance of Pay As You Earn by some local governments during the transition of payroll systems, reduced external financing for specific projects, increased illicit alcohol production, and changes in the composition of imports that affected taxable items,” the Ministry report states.
Despite the weaker performance in December, cumulative domestic revenue collections for the first half of the 2025/26 financial year showed improvement. Between July and December, the government raised Shs16,877.73 billion, equivalent to 94.1 percent of the Shs17,931.29 billion target. This represented a shortfall of Shs1,053.56 billion but marked an 8.69 percent increase compared to the Shs15,528.94 billion collected during the same period in the previous financial year.
Government expenditure in December totaled Shs2,456.91 billion, exceeding the planned Shs2,314.5 billion by Shs142.41 billion. Spending on goods and services accounted for most of the overrun, reaching Shs795.73 billion, which was 130.5 percent of the approved budget for the month.
Compensation of employees amounted to Shs493.13 billion, below the planned level, while social benefits were also underspent by Shs54.68 billion. Interest payments stood at Shs388.34 billion, in line with projections and covering both domestic and external debt obligations.
The report further shows that government investment activity increased during the month. Net acquisition of non-financial assets reached Shs676.6 billion, surpassing the planned Shs445.93 billion, largely reflecting higher spending on public infrastructure projects.
The Ministry notes that revenue performance continues to be influenced by donor flows and compliance challenges in certain sectors, including illicit trade. As the country enters the second half of the 2025/26 financial year, the December results highlight the pressure on revenue mobilisation amid sustained spending demands.
