A report by the Finance ministry has revealed that in October 2025, total revenues and grants amounted to Shs2,573.09b, representing a performance rate of 89.2 percent against the programmed target of Shs2,884.89b.
The report shows that this translated into a shortfall of Shs311.80b, largely arising from lower-than-expected domestic revenue collections and less than programmed grant disbursements.
‘Total domestic revenue collections during the month amounted to Shs2,529.64b, achieving 94.4 percent of the target. This translated into a shortfall of Shs151.10b attributed to lower-than-expected receipts from both direct and indirect domestic taxes,’ the report shows.
It notes that direct domestic taxes posted a shortfall of Shs38.13b primarily due to lower collections from Pay as You Earn (Paye) and Treasury Bills.
The report adds that the shortfall in Paye was mainly on account payroll systems transition challenges as some local governments transitioned to the new Human Capital Management (HCM) system, while the shortfall on Treasury Bills was due to lower interest rates than projected.
Indirect domestic tax collections posted a shortfall of Shs13.40b.The underperformance was attributed to lower collections in excise duty particularly on beer, soft drinks and phone talk time.
The report adds that taxes on international trade amounted to Shs1,037.69b above target of Shs1,028.24b, hence registering a surplus of Shs9.44b. The over performance was largely driven by higher collections from petroleum duty, import levies and infrastructure levies.
Cumulatively, total domestic revenue collections for the period July to October 2025 amounted to Shs10,164.35b against a projection of Shs10,618.29b, registering a cumulative shortfall of Shs 453.94b.
Govt response
Finance ministry Permanent Secretary and Secretary to the Treasury Ramathan Ggoobi says government expenses during October 2025 amounted to Shs3,272.03b, reflecting a 104.3 percent performance rate against the planned Shs3,136.08b for the month.
‘This performance was mainly driven by higher than planned spending for the purchase of goods and services, as well as grants, particularly to Local Governments.’