Industry and Trade

High taxes levied on hotels responsible for low occupancy rate

he expressed concern over the high taxes levied on hotels yet others, especially those located upcountry, as well as very low occupancy rate

In a bid to ensure the entrepreneurial culture is preserved and propels the existing entrepreneurs in the market, the Government of Uganda is closing on arrangements to have taxes on hotels scrapped off or reduced.

The Minister of Tourism Ephraim Kamuntu has said that reduction of taxes on hotels will s well attract more tourists which in essence will lead to greater revenue to the government.

“ Many hotels in the country have failed to improve their services to international standards because of the tax burden on them. As government, we have finished reviewing the demands for hotel owners and we are ready to revoke taxes so that they could expand their businesses to attract more tourists,” he said.

He added that the scrapped or reduced taxes will be reflected in the 2017/2018 budget because government wants to increase the number of tourists that come to Uganda annually from the current 1.3m to 4m by 2020.

Prof Kamuntu revealed that the tourism industry currently contributes 9 percent to the country’s Gross Domestic Product, adding that if the taxes on hotels are scrapped, government would collect much money due to the increased number of tourists caused by the improved hotel services.

“ There is no government that can survive without the private sector and that’s why we have to consider some of their demands because they help us in terms of development. Tourism is one of the fastest growing sectors in the world and this means that we must prioritise it as a country,” he said. However, he challenged hotel owners to train their staff on hospitality so that they could get as many tourists as possible.

He made the remarks last week in Kampala while officiating at the launch of the four tourism products that were unveiled by the Uganda Tourism Association (UTA).

The new products are; Uganda National Museum Indigenous dinner, Namugongo Shrine son et lumier, Uganda Rwenzori Cultural Trail and Interpretation capacity building for birding and the Uganda iconic tourism product development.

The UTA president, Mr Boniface Byamukama, said the development of the new products follows Uganda’s quest to be a leading tourism destination with the purpose of creating employment opportunities and increase revenue.

“I urge our partners in the government and private sector to take advantage and invest in these products. By working together, we will sustainably push Uganda tourism sector to the next level. We now have strategic plans that will guide us in policy and planning,” he said.

Mr Byamukama said that their strategic plans include marketing Uganda to the international arena, training tour guides and hotel managers and also embrace the use of internet to get more customers.

But he expressed concern over the high taxes levied on hotels yet others, especially those located upcountry, as well as very low occupancy rate.

Currently, hotels in Uganda have an occupancy rate of 17 per cent. However, if taxes are scrapped, Mr Byamukama anticipates that the percentage will increase since many hotels will then invest in having better services to attract more tourists.

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