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As Uganda moves closer to the 2026 general elections, one critical issue looms large—rising public debt and its potential consequences for taxpayers.
Over the years, Uganda’s national debt has grown at an alarming rate, driven by government borrowing to finance infrastructure, public services, and election-related expenditures.
While borrowing can be a necessary tool for national development, the real concern is whether the country’s debt levels are sustainable and, more importantly, how the government plans to repay it.
Will Ugandans face new tax policies, increased tax rates, or widened tax enforcement to bridge the fiscal gap? More than ever, taxpayers must brace themselves for the possible financial implications of an election-year economy.
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Uganda’s public debt has more than doubled in the last decade, reaching unprecedented levels. According to the Ministry of Finance, the country’s debt-to-GDP ratio has been hovering dangerously close to unsustainable thresholds.
While the government argues that borrowing is necessary for economic transformation—funding roads, energy projects, and public services—the cost of repaying these loans continues to rise.
A significant portion of Uganda’s revenue now goes toward servicing debt rather than funding essential sectors such as health, education, and business development. With an election approaching, the pressure to spend more on social programs and political promises increases, raising questions about where the government will find the funds to meet its obligations.
One likely scenario is the introduction of new tax policies aimed at raising revenue. Historically, election periods have been followed by policy adjustments designed to generate funds for debt repayment.
This could mean an increase in existing tax rates, the introduction of new levies, or stricter tax enforcement by the Uganda Revenue Authority (URA).
Sectors such as telecommunications, banking, and manufacturing could see higher corporate taxes, while small businesses and informal traders may experience tighter tax compliance measures.
Additionally, the government may expand indirect taxation—such as VAT and excise duties—which will inevitably raise the cost of living for ordinary citizens. Taxpayers should remain vigilant and anticipate potential policy changes in the post-election period.
For businesses and individuals, protecting themselves from sudden tax hikes requires strategic financial planning. First, businesses must ensure they are tax-compliant and maintain proper financial records.
Unstructured businesses often face harsh penalties when tax enforcement intensifies. Investing in tax advisory services and staying updated on legislative changes can help businesses prepare for potential adjustments. Additionally, diversifying income sources and exploring tax-efficient investment options can cushion businesses and individuals from abrupt financial strain.
Another way to mitigate the burden of rising taxes is through increased public accountability. Citizens and business leaders must actively engage in budget discussions, policy formulation, and government accountability initiatives.
The more transparent government borrowing and expenditure are, the better taxpayers can advocate for fair fiscal policies. Uganda’s civil society organizations, tax advisory firms, and financial analysts play a crucial role in monitoring how borrowed funds are utilized and whether tax policies serve the interests of both economic growth and social welfare.
If the government fails to manage debt sustainably, Uganda could face economic repercussions such as currency depreciation, inflation, and slowed foreign investment. Investors tend to be cautious during election years, fearing policy instability and increased economic risks.
A sharp rise in inflation—caused by excessive government spending and potential tax increases—could erode the purchasing power of Ugandans, making basic commodities unaffordable. The country’s private sector, which drives job creation and economic stability, could also suffer setbacks due to increased taxation and reduced consumer spending.
The big question remains: Can Uganda sustain its rising public debt without overburdening taxpayers? The answer largely depends on the government’s fiscal discipline, debt repayment strategy, and willingness to implement policies that balance revenue collection with economic growth.
If policymakers adopt responsible borrowing practices and focus on expanding Uganda’s tax base rather than simply increasing rates, the country could avoid the pitfalls of excessive debt reliance. Enhancing tax compliance through digital systems, reducing revenue leakages, and promoting business-friendly policies could generate sufficient funds without overtaxing citizens.
As the 2026 elections draw closer, taxpayers must remain financially aware and prepared for potential shifts in Uganda’s economic landscape. Whether through tax hikes, policy reforms, or stricter enforcement, the impact of rising public debt will be felt across all economic sectors.
The writer is a Chartered Accountant & Tax Advisor – kjoshuakato@gmail.com