MBARARA – Hotel owners under their umbrella association of Uganda Hotel Owners Association (UHOA) have petitioned the government of Uganda through the Minister of Tourism Wildlife and Antiquities over the heavy taxes levied to their businesses.
Mr Aggrey Twijukye, the UHOA Chairperson for Western region decried the heavy taxes imposed on hotel owners in Uganda which he said has crippled their businesses.
He said that hotels owners are the most burdened taxpayers.
“We live and operate under harsh conditions yet we are the biggest contributors in selling and promoting this country, as I talk, we pay more than 15 taxes for a single hotel and if you fail to pay, the local council leaders and courts summon us tasking us to pay,” said Twijukye.
These and more concerns were raised during a stakeholder’s workshop of Uganda hotels, food, tourism, supermarkets and allied workers union that was held at Oxford Hotel in Mbarara this week.
Twijukye revealed that apparently they are paying over 15 different taxes ranging from Operational tax, withholding tax, property tax, rental tax, VAT, Trading license, annual hotel subscription, bar tax, copyright tax, entertainment tax.
He added that even the rate at which upcountry hotels are hired for services if far lower than those in Kampala. “We use the same materials to build these hotels but our services are hired differently, upcountry hotels are hired lower to those in Kampala so we should be exempted from some taxes if the government wants us to remain in this business”
“We know that our sector is the most contributors to the country’s GDP but when you look at the national budget allocation, the sector of tourism is given less money. This is not fair we call upon the government to revise these taxes we pay because they have suffocated our businesses,” added Twijukye.
In response, Prof. Ephraim Kamuntu the Minister for Tourism, Wildlife and Antiquities said that the interest of government is to make the economy vibrant through a strong private sector.
“Our economy has been private sector driven so we cannot overtax it, I will look at their complaint because they mentioned a lot of taxes, this matter was also raised on the presidential investors’ round table it is already in higher authorities but am going to add my voice after ascertaining these taxes being levied on to hotel owners.” Hon Kamuntu remarked.
On limited budgets to the tourism sector, Kamuntu answered;
“As the Minister it is not proper to begin arguing the ministry’s budget because the appropriate forum for me is through cabinet nonetheless the fact that it was raised by hotel owners, it’s a valid question because for this industry to be competitive, we must compete with our neighbours like Rwanda, Kenya and so we should begin to ask how much is Kenya spending on tourism and so Rwanda for me to compete with them”.
He noted that the tourism sector which is nearly bringing 23% of total foreign exchange should be allocated a higher budget.
“I think it’s logical because it’s contributing 10% of Uganda’s growth, it is logical that in the national budget, this sector should get 5% of the national budget, am pleased that this matter has been raised by stakeholders and I will also raise it in cabinet,” he said.
Decentralization of the Tourism sector
Hon Kamuntu in an exclusive interview noted that the government is moving to decentralize tourism which is in line with the decentralization policy that aims at bringing services nearer to the people.
“As it is in local government as it will be in tourism, we want every district to have a Tourism Officer who must relate with us at the headquarters in developing all tourism attractions so that domestic tourism has an income-generating activity that benefits these districts where this attraction is located.
He said they want to push districts to be creative and innovative to ensure that the tourism sector which is earning more than $1.5 billion and employing more than 3% of Uganda’s labour force, benefits them through decentralization.
Emmy Kateera the Deputy RDC Mbarara echoed that in order to develop this country, some of the rights must be forgone.
“It is true there is over-taxation but it does not come by accident that’s why I told you we must forego some of the rights in order to develop, but it is good to keep on engaging the higher authorities,” said Kateera.