Tourism sector urges govt to reduces taxes to boost recovery

Uganda’s tourism sector, a vital contributor to the nation's economy, is urging the government to reduce the numerous taxes and fees that are crippling businesses within the industry.

Stakeholders argue that the current tax regime, which includes 25 different types of central and local government taxes, levies, licensing fees, and statutory contributions, is stifling the sector's recovery and growth.

The tourism industry, which is still recovering from the devastating effects of the Covid-19 pandemic, is seen as a cornerstone of Uganda’s economic revival.

However, the multitude of taxes and fees imposed on tourism and hospitality businesses is making it increasingly difficult for them to operate profitably.

These financial obligations, according to industry players, are hindering investment and innovation in a sector that has the potential to drive substantial economic growth and job creation.

Among the financial burdens faced by the industry are central government taxes, local government levies, licensing fees, and statutory contributions.

The complexity and volume of these obligations are overwhelming businesses, leading to calls for the government to streamline and reduce these costs.

Stakeholders are advocating for the consolidation or reduction of taxes and fees to create a more favorable business environment.

They believe that a more supportive tax policy would encourage investment in the tourism sector, improve service quality, and enhance Uganda’s competitiveness as a global tourism destination.

“The tourism industry has the potential to be a major driver of Uganda's economic recovery, but the current tax burden is too heavy,” one industry leader remarked.

“We need a tax regime that supports, rather than stifles, growth.”

As the tourism sector pushes for these changes, the government faces a delicate balancing act.

On one hand, there is a need to generate revenue to fund public services, but on the other, there is a critical need to support an industry that could be pivotal in revitalizing the economy.

The outcome of this push for tax reforms will be crucial in determining the future growth and sustainability of Uganda’s tourism and hospitality sectors.

A reduction in the tax burden could provide the necessary boost for the industry to thrive, making Uganda a more attractive destination for both investors and tourists.