Kadaga urges govt to lower incentive thresholds for tourism investors

The Speaker of Parliament Rebecca Kadaga has urged the Government to lower the thresholds at which it offers incentives to different actors in the tourism sector.

Kadaga said the if threshold is lowered, more jobs would be created and the stakeholders' activities would be boosted leading to an enhancement in the tourism sector's contribution to the gross domestic product of the country.

"If you are an investor and you in a free zone or industrial park, you get a 10 year tax holiday; nothing big has been done with tourism. Then when it comes to tourism, the Finance Ministry says if your investment is worth $8m(about sh30b), you are entitled to an exemption of excise duty yet very few people have  such investment value," said Kadaga.

During the Uganda Hotel Owners' Association (UHOA) breakfast meeting at Hotel Africana , she added: "So you small people like me are not eligible; I have three hotels by the way, I am providing employment and market but even when I combine all of them I cannot even reach $2m (about sh7b) so I am nowhere near the incentives."

Kadaga also noted that although the tourism sector contributes 23% of the foreign exchange, the government needs better policies and enhanced financing to boost it. She said the government is not speaking to the importance of the industry.

Susan Muhwezi, the UHOA expressed her concern over taxation, saying it has crippled hoteliers and the hospitality sector. She said the players pay about 15 types of taxes and the government has to reduce them if the industry is to boom.

Some of the examples of the taxes they pay include Pay As You Earn, Value Added Tax, hotel tax, local service tax, service charge, copyright tax, Property Tax, NSSF occupational safety and health among others.

"These multiple taxes levied to us have made Uganda the most expensive tourism destination as compared to other countries in East Africa. Ugandans have not embraced local tourism partly because of expensive services," she stated.

Prof. Ephraim Kamuntu, the Minister of Tourism, Wild life and Antiquities said, the tourism sector contributes 10% to Uganda's economic growth and employs a lot of people majority of which are women.

However, he said the skills in hospitality are still lacking and called for human capital development to compete on regional and global level. He said the government has established a tourism training institute which will impact skills to several Ugandans.

"You come to the desk, the person asks the tourist; what do you want? You ask for the menu and sometimes the workers are not conversant. Our people do not have international skills and that's why most of the senior staff in hotels here are not Ugandans" said Kamuntu.

‘Tourism sensitive to political environment'

Kamuntu said the recent riots in Kampala have made some tourists cancel their flights to Uganda.  He said some tourists that had paid half of the fees have asked for their money to be reimbursed because some diplomatic missions issued travel advisories over the demonstrations that have rocked Kampala recently.