Ugandan opposition leader Robert Kyagulanyi has proposed eliminating income tax for workers earning less than one million shillings monthly, equivalent to about $260. The National Unity Platform presidential candidate said the measure would spare roughly 90 percent of formal employees from Pay-As-You-Earn deductions ahead of elections in 2026. Current policy sets the tax-free threshold at 235,000 shillings per month, but Kyagulanyi argues most households cannot afford the burden amid rising inflation and debt.
The plan would reduce annual PAYE revenue by an estimated 3.25 trillion shillings, about half the total collected from wage earners in the 2023-24 fiscal year. Government figures show PAYE generated 6.5 trillion shillings last year, representing nearly one-fifth of domestic tax receipts. Economists warn the shortfall could threaten public services unless officials find alternative revenue sources or cut spending significantly.
Kyagulanyi said his party would recover lost income by reducing wasteful government expenditure and modernizing tax collection systems. Officials spent 2.27 trillion shillings on travel, workshops and entertainment last year, three times the budget allocated for water and social protection programs. The opposition leader also pointed to untapped mineral resources and weak enforcement of existing tax laws as potential funding streams.
President Yoweri Museveni, who has governed since 1986, plans to seek another term against Kyagulanyi. Uganda's public debt has climbed to 116 trillion shillings, consuming about one-third of domestic revenue for interest payments alone.
The plan would reduce annual PAYE revenue by an estimated 3.25 trillion shillings, about half the total collected from wage earners in the 2023-24 fiscal year. Government figures show PAYE generated 6.5 trillion shillings last year, representing nearly one-fifth of domestic tax receipts. Economists warn the shortfall could threaten public services unless officials find alternative revenue sources or cut spending significantly.
Kyagulanyi said his party would recover lost income by reducing wasteful government expenditure and modernizing tax collection systems. Officials spent 2.27 trillion shillings on travel, workshops and entertainment last year, three times the budget allocated for water and social protection programs. The opposition leader also pointed to untapped mineral resources and weak enforcement of existing tax laws as potential funding streams.
President Yoweri Museveni, who has governed since 1986, plans to seek another term against Kyagulanyi. Uganda's public debt has climbed to 116 trillion shillings, consuming about one-third of domestic revenue for interest payments alone.
