Higher taxes likely to make Uganda a lot more expensive for tourists
Posted March 15, 2014 by Prof. Dr. Wolfgang H. Thome in Uncategorized.
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FRESH TAX ASSAULT ON TOURISM IN THE MAKING
(Posted 15th March 2014)

Tourism sources were swift to condemn revived plans to slap the sector
with an 18 percent VAT for upcountry accommodation, saying that '
together with another planned tax rise on fuel this will make Uganda's
tourism products a lot more expensive at a time when the country faces
global opposition and decampaigning over the recently passed 'anti
gay' and 'anti miniskirt' bills
'. Added another regular source: '
We shall wait for the budget proposal to be read. If however these
proposals go through and the funds allocated to tourism for promotion
are not upped considerably at the same time, we will finally know that
this is a government which has and continues to let the tourism sector
down very badly and no amount of words will be able to appease the
discontent this will raise. We in tourism have gotten a raw deal over
the years and there is no point in blaming the UTB or the ministry
because their hands and feet are tied by laughable budget allocations.
Yet it is common knowledge that tourism could be the answer to so many
economic challenges Uganda has. We as a sector can create jobs, bring
investment, earn a lot of foreign exchange, but not this way, not by
constant neglect and always new higher taxes and more fees'.
News emerged yesterday that members of the ruling party had reacted to
the withdrawal and withholding of donor and development partner funds,
which left a serious hole in the national budget, by proposing a wide
range of new and increased taxes to fill the gap.
Wananchi, the Kiswahili word for local people, too are in for a rude
shock as the plans include a rise of 200 Uganda Shillings in the cost
of Kerosene, still a widely used method to light houses in the evening
– only about 10 percent of Uganda's households are connected to the
notoriously unreliable electricity grid which already charges
exorbitant tariffs and is seeking yet another rate increase – while
the party members also reportedly targeted milk products, a move which
if implemented would hit the country's ranchers as well as consumers
with a further rise in the cost of a packet of milk by 18 percent.
Another common commodity, sugar, was also singled out for higher
taxes, raising the spectrum of a tough financial year 2014/15 ahead
for the Ugandan people and the Ugandan tourism industry, where the
mentioned items constitute a major portion of inputs, fuel for the
safari vehicles and milk and sugar for purchases in hotels, resorts
and safari lodges.
What goes around comes around is perhaps the most appropriate phrase,
as the reality is sinking in now that the two pieces of legislation do
after all have consequences and that hasty efforts to mitigate the
loss in financial support will make life in Uganda a lot more
expensive come the new financial year which starts on July the 01st.
Watch this space for breaking and regular news from across the Eastern
African region.
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SIBOMANA Jean Bosco
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