Tourism development levy to raise sh23b

By Samuel Sanya and Ronnie Kijjambu

Tourism sector players have welcomed plans for the operation of a tourism development levy to close a funding gap in the sector.

The sector will also remit Pay-As-You-Earn taxes to the Government.

Tourism is Uganda’s top foreign exchange earner, bringing in $800m (about sh2trillion) annually ahead of coffee at $500m (about sh1.3trillion). Despite this, the sector has been constrained by low budgetary allocations.

Herbert Byaruhanga of the Uganda Safari Guides Association (USAGA) said the association will collect and remit Pay-As-You-Earn taxes to the Government in the next financial year.

“We shall start to remit taxes to the Government at the beginning of this financial year to support its efforts to finance this sector,” he said during a stakeholders meeting the Uganda Museum recently.

Byaruhanga said it does not make sense to demand financial support from the Government when the sector is not making any financial contribution to the Treasury.

A tourism development levy on sector players will raise $9m (about sh23b) to market the country internationally and improve strategic infrastructure.

Uganda spends about $25,580 on marketing its tourism potential, compared to $23m by Kenya, $10m by Tanzania and $5m by Rwanda annually.

The Uganda Tourism Board is faced with a sh17b funding shortfall, according to a strategic sector development plan.

The national budget framework 2013/14 stated that 40km of tourism roads will be rehabilitated and sh10b will be set aside to rehabilitate the Kasese Aerodrome to international airport standards.

Tourist arrivals increased 17% to 945,899 in 2010, from 806,658 in 2009. There was a 25% increase in the number of visitors to national parks, from 151,818 in 2009 to 190,112 in 2010.

Close to 209,000 visitors visited Uganda Wildlife Education Centre (UWEC), of which 95% were Ugandans.

The national budget framework 2013/14 notes that tourism expenditure in the country increased from $564m in 2009 to $662m in 2010, reflecting a 14% increase.