State Minister for Investment and Privatisation, Evelyn Anite, has announced a set of tax incentives designed to attract more investment into Uganda’s hospitality sector, including long-term tax relief for qualifying hotel developers.
Anite made the announcement during the launch of Sarovar Hotels Kampala, the first Ugandan facility by Indian hospitality group Sarovar Hotels, which officially opened its doors in the capital.
She revealed that government is offering a 10-year tax exemption for eligible hotel investors as part of a broader strategy to strengthen Uganda’s position as a regional tourism and investment destination.
According to Anite, the incentives also include Value Added Tax (VAT) waivers and tax-free importation of hotel furniture, fittings and equipment, aimed at reducing startup and operational costs for investors.
“This has not been there before,” Anite said, referring to the 10-year tax holiday for hotel operators.
She explained that many of the required hospitality inputs are not locally manufactured, making imports expensive due to taxes. Removing these levies, she said, will make it easier for investors to establish high-quality facilities.
“We do not manufacture many of these hotel furnishings locally, and they used to be very expensive because of taxes. Now investors can import them tax-free,” she said.
Anite emphasized that the hospitality sector remains one of the most attractive investment areas in Uganda, driven by growing tourism, business travel, and expectations of increased activity linked to oil and gas development.
She noted that the country still faces a shortage of high-end accommodation, particularly for international conferences and business travellers.
“If visitors only find hotels like Serena, that will not be enough. We need many more hotels because Uganda is no longer a small economy,” she said, referencing Kampala Serena Hotel.
Speaking at the same event, Sarovar Hotels Chairman Ajay Bakaya said Uganda was selected for expansion due to its growing economic potential and stable investment climate.
“We see Uganda as a very special country in terms of business. There is an immensely bright future,” Bakaya said.
Sarovar Hotels operates about 150 hotels globally and has had a presence in Africa for over 25 years, with operations in countries including Kenya, Zambia and Somaliland.
Bakaya said the Kampala property is the group’s first in Uganda, noting that development took five years and involved design work, infrastructure preparation and staff training.
He added that the company intends to introduce international hospitality standards, global reservation systems and wider marketing networks to Uganda’s tourism industry.
“We have some beautiful rooms and one of the best food offerings in the city,” he said. “We are hoping to attract people from within Uganda, outside Uganda and across Africa.”
The new incentives come as government steps up efforts to attract investment into hospitality, a sector officials say will be central to supporting tourism growth, regional conferences and the anticipated expansion of oil-related business activity.