The government invested heavily in infrastructure in December 2024.
Lower spending than planned and a revenue collection surplus in December 2024 has seen the government save more than it had projected.
During December, the Government’s fiscal operations (revenue and expenditure) resulted in a fiscal surplus of 737.17 Billion Shillings, surpassing the 67.59 Billion surplus that it had projected for the month.
The higher-than-planned surplus resulted mainly from lower spending levels than had been projected, by 13.6 percent, during the month, as well as a surplus in tax collections for the month.
According to the Performance of the Economy Report for December, the Uganda Revenue Authority, raised a total of 3.625 Trillion Shillings during the month, against a target of 3.314 Trillion.
This 310.73 billion shilling surplus more than offset the shortfalls under other revenue (non-tax revenue) and grants that were also below target.
Non-tax revenues amounted to 125.72 compared to the projected 174, while grants realized amounted to 259 instead of the projected 185.4 Billion.
Additionally, the Government had initially projected to receive a budget support grant disbursement of 8.74 billion in December 2024.
However, this was disbursed in earlier months of the financial year.
In total, during the month, revenue amounted to 3.909.79 Trillion against a target of 3.673.72 Trillion Shillings.
Explaining the tax revenue surplus, the Ministry of Finance, Planning and Economic Development says that corporations performed better and made higher returns.
“The performance can be attributed to higher than the projected profitability of firms and sales induced by the increased economic activity during the festive season as well as Government clearing its tax obligations for most of the first half of 2024/25 in December 2024.”
An analysis of the tax collections shows taxes on income and profits or direct taxes totaled 2.071 Trillion, registering a surplus of 291.64 billion Shillings.
On the other hand, taxes on international trade registered a 38.76 Billion surplus while taxes on goods and services or consumption taxes returned a surplus of 4.16 Billion Shillings.
During the month, Government expenses amounted to 2.585 Trillion, which was lower than the planned total of 2.993 Trillion Shillings implying a performance of 86.4 percent.
Government grants or transfers, including to local governments, tertiary institutions and referral hospitals, were higher than the original plan by 37.5 percent, while expenses on social benefits exceeded the projections by 18.2 percent.
This signifies improved service delivery to the local communities, according to the ministry.
On the other hand, the compensation of employees and the purchase of goods and services were significantly lower than projected for the month.
During the month, the Government expended 585.12 Billion Shillings on the acquisition of non-financial assets which included infrastructure projects.
This amount was against a plan for the month of 612.76 billion resulting in a performance rate of 95.5 percent.
Despite this 4.5 percent shortfall, the December 2024 performance of net acquisition of non-financial assets was the best of the financial year so far and reflects the increased release of funds to facilitate development projects in Quarter two of the current financial year.
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