(Kampala) – Uganda’s tourism industry leaders have raised concerns over the high number of taxes imposed on tourism-related businesses, warning that these levies may undermine the sector’s potential to contribute $5 billion (sh18.3 trillion) to the national economy by 2025. The Confederation of Uganda Tourism Association (COUTA) and other stakeholders are calling for tax reforms, arguing that reducing these costs is essential to make Uganda a competitive tourism destination.
Yogi Birigwa, president of COUTA, emphasized that investors in Uganda’s tourism industry currently face over 25 distinct taxes, including charges on restaurants, bars, services, and ground rent. These levies, she said, create a high-cost environment that deters potential investment in Uganda’s tourism sector, which is heavily relied upon for economic growth under the fourth National Development Plan (NDP IV).
Uganda’s tourism sector is a central component of the NDP IV, which aims to boost the sector’s contribution to the GDP by attracting more visitors and making the country a competitive destination. The plan seeks to capitalize on Uganda’s rich natural resources and diverse wildlife by developing and promoting tourism offerings.
| Tourism Related Taxes in Uganda |
|---|
| Restaurant Tax |
| Bar Tax |
| Services Tax |
| Ground Rent Tax |
| Other fees and levies |
Birigwa highlighted that, although Uganda’s natural beauty offers a unique draw, the high cost of doing business poses a significant challenge compared to neighboring countries. During an X Spaces discussion on Uganda’s tourism sector, she warned that maintaining multiple taxes on hotels could ultimately push investors to seek opportunities elsewhere.
The tourism industry’s challenges extend beyond taxation. Birigwa pointed out that limited budget allocations make it difficult to promote Uganda’s tourism and related products effectively. She added that there are still gaps in marketing, infrastructure, and research to strengthen Uganda’s position in the global tourism market.
In the same online discussion, participants also identified several other barriers. Tourism promoter and founder of Great Lakes Safaris, Amos Wekesa, urged Ugandans to actively support the sector, stressing that domestic tourism is essential for achieving the targets outlined in NDP IV. According to Wekesa, tourism provides direct and indirect employment opportunities across various sectors, including transport, food trade, handicrafts, and hospitality.
Wekesa also called for government initiatives to improve infrastructure, such as better airport facilities, roads to game parks, and accommodations to enhance the experience for both local and international visitors.
Muhereza Kyamutetera, CEO of the Uganda Tourism Association (UTA), agreed, noting that Uganda’s unique tourism products need better packaging and presentation to capture a competitive edge. He advocated for what he called “business-unusual efforts” to consistently market Uganda as a prime destination, particularly in key international markets.
Stephen Asiimwe, executive director of the Private Sector Foundation Uganda (PSFU), added that they are pushing for policy reforms to make the tourism sector more attractive to both tourists and investors. He explained that these reforms involve changes in taxation, improved marketing, and promoting investment in the industry. Asiimwe noted that the government’s recent efforts to reform tax policies, improve promotion strategies, and attract foreign investment were a positive step towards realizing these objectives.
Vivian Lyazi, commissioner for tourism development in Uganda’s Ministry of Tourism, assured industry players that the government is working to consolidate the various small taxes imposed on hotels into a single, fairer tax. Lyazi said the government is also focusing on infrastructure projects, such as road developments to national parks, and collaborating with Uganda’s embassies and missions abroad to market the country’s tourism potential more effectively.
Industry stakeholders agree that these changes are crucial for Uganda to reach its ambitious tourism revenue goals while enhancing the nation’s appeal as a destination for both business and leisure travelers.