Disgruntled Private Sector Frustrating Uganda’s Already Ailing Tourism

Tourism might be among sectors that earn Uganda the biggest foreign currency but it is at the edge of losing all the gains made over the years.

Tour operators have for many years grappled with grievances which they accuse the government of persistently ignoring. They say soon or later, recipe they could pull out of business due to the very unfavorable situations under which they work.

Under their umbrella organization Association of Uganda Tour Operators (AUTO), ask players in the private sector plan to file a petition before the Speaker of Parliament Rebecca Kadaga expressing their discontent after exploring all the other avenues in vain.

The group decries the costly fees required for foreigners to acquire a Ugandan Visa which denies Uganda’s tourism industry competitive ground with neighbors Kenya, Rwanda and Tanzania.

Recently, Uganda doubled its Visa fees from USD 50 to 100 but Kenya and Tanzania’s Visa remained at USD 50 while Rwanda’s is at USD 30. The effect of this they say is that it makes Uganda a much more expensive destination making it less attractive to international visitors.

In addition to affordable Visas (compared to Uganda), Kenya, Tanzania and Rwanda exempted Visa fees for specified countries and for the case of Kenya, children who travel with their parents.

According to World Tourism Organization (UNWTO) statistics, the average growth rate of foreign visitors coming to Uganda between 2011 and 2014 was 1.5% whereas Tanzania and Rwanda had an average growth of 4.6% and 4.9% respectively.

Surprisingly, Rwanda’s well established tourism sector coupled with good policies that have fostered its regional competitiveness, aggressive marketing and good infrastructure have made it the emerging tourism leader.


Another pressing issue raised by Uganda’s private sector is the high and unreasonable taxes levied on them by Uganda Revenue Authority. Local businesses pay 18% VAT in taxes annually.

“Tourism is an invisible export and this is recognized by UNWTO to which Uganda is a party. By the nature of our industry, clients are abroad making it unviable to charge VAT on invoices we send the abroad. Tour operators and travel agents provide an ‘intermediary’ service which is not meant to be subject to VAT,” reads the petition that they will soon present before Speaker Kadaga.

Tour agencies also pay PAYE (30%), Local government tax (USD 2 per bed night), employee service tax (5%), UWA taxes (15%), Corporate tax (30%) and community taxes all of which make it inevitable for a tour package cost to be high.

Subsequent implications also include decrease in direct and indirect employment, low returns on investment and unfair pricing competition between the formal and informal sector.

Garry Segal is the proprietor Wild Places Africa and owns a hotel in Kidepo National Park. During a recent meeting between tour operators and the State Minister of Wildlife, Tourism and Antiquities Godfrey Kiwanda, Segal was embittered by government’s bureaucracy in responding to problems that affect the sector.

“As a result of these ridiculous taxes and poor policies, I have had to retrench my staff because I can no longer maintain the staff size. This affects the quality of services due to low guest occupancy. The financial pinch has also led me to reduce my marketing budget. It is no longer viable to invest in tourism,” lamented Segal who is planning to shut down his business.

Whereas some suggest that the solution lies in boosting domestic tourism by wooing Ugandans to explore their country, it remains a far-fetched dream if the taxation issue isn’t dealt with.

Some of the tour operators proposed to Minister Kiwanda that government through the Education Ministry ought to support local tourism by introducing regular trips by school going students.

They say that for government to suggest that private sector provides discounts would be ‘strangling an infant that isn’t walking yet’.

Tourism currently employs about 550,000 people directly and indirectly in Uganda majority of who are youth and women. The comparative edge over other sectors is that benefits from tourism have an enormous spillover effect.

Regarding infrastructure which is an enabler for the sector, tour operators feel the government has equally not done enough.  They are concerned about the state of the upcountry roads that connect the various national parks.

Most of the national parks are not connected to the electricity grid which makes those in the hospitality business struggle with extra expenses. Operators also want Entebbe International airport to be expanded and upcountry airstrips developed.

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