By default the maximum file upload size is set to 2MB.  It is not a Drupal issue, instead a php issue as upload_max_filesize is set in your php configuration (php.ini file).  Therefore it is a server-side configuration. If you have access to the php configuration file, I would recommend to make the changes directly in it.  Yet, on some occasions you cannot access the server configuration (on a shared hosting, for instance) and if you wish to alter some of your server...