'Multiple taxes hurting investment in tourism sector'

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Players in the tourism sector have called on the government to review the multiple taxes charged on them if the sector is to generate the $5 billion (sh18.3 trillion) set as its target in the fourth National Development Plan (NDP IV).

In NDP IV, Uganda's economy is banking on tourism's contribution to the GDP.

The plan also aims to make Uganda a more competitive tourist destination by developing and promoting its tourism, wildlife, and heritage resources.

Yogi Birigwa, the president of the Confederation of Uganda Tourism Association (COUTA), said that currently, investors in the sector are charged over 25 taxes, including restaurant tax, bar tax, services tax and ground rent tax.

Uganda remains a MICE destination because of improved accommodation facilities and quality service. (Julius Luwemba/File)

“So the cost of doing business remains high compared to the neighbourhood. Although we are gifted by nature whose diversity is amazing, the challenge remains on the many taxes,” she said on Monday.

She said failure to address and reduce the number of taxes charged on hotels will push investors away.

Birigwa made the comments during an X Spaces session on the challenges and opportunities of Uganda’s tourism sector.

She said that multiple taxes aside, budget allocations towards the sector are not sufficient to match the efforts needed to promote Uganda’s tourism and related products.

During the online discussion, participants pointed out other challenges such as lack of marketing and promotion of Uganda’s beauty, limited research on how other tourism sectors are performing, as well as poor infrastructure.

To overcome some of the challenges, Amos Wekesa, a tourism promoter and founder of Great Lakes Safaris Limited, called on Ugandans to embrace their own tourism sector, which he said is the fastest way of increasing the numbers projected by the government in NDP IV.

His argument is that tourism impacts everyone in society through various services, including transport, food trade, craft and arts business, and accommodation.

Wekesa also called for deliberate efforts from the government to improve infrastructure such as airports, road networks in game parks and accommodation.

'Business-unusual efforts'

Muhereza Kyamutetera, the CEO of the Uganda Tourism Association (UTA), weighed in on the subject.

He said investing in the packaging of the beautiful tourism products in Uganda can provide a competitive edge.

“Significantly, business-unusual efforts are now needed more than ever to consistently market and sell Destination Uganda in crucial priority markets if we are to achieve these steep targets,” he said.

Lilly Ajarova, the Chief Executive Officer for Uganda Tourism Board accompanied by world athletics champion Joshua Cheptegei while hiking Rwenzori mountains. (Julius Luwemba/File)

On his part, Stephen Asiimwe, the executive director of the Private Sector Foundation of Uganda (PSFU), said they are pursuing policy reforms to ensure that the tourism sector becomes more attractive to tourists.

He spoke of reforms in taxation, promotion and marketing of destination Uganda, agitation for investments in the tourism sector, among other things.

Vivian Lyazi, the commissioner for tourism development in the tourism ministry, assured sector players that the taxation of different components in the hotel are being addressed so as to have all the small taxes collapsed into one fair tax.

He said the government is pursuing infrastructure development, especially roads leading to national parks, in addition to promotion activities to further promote Destination Uganda.

Lyazi added that they are working with Uganda’s missions abroad to further market Uganda’s tourism sector.