Uganda: Hoteliers Cry Foul Over Tax

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New Vision (Kampala)

16 June 2008
Posted to the web 17 June 2008

Mubiru Kakebe
Kampala

THE new hotel tax will make Uganda a more expensive tourist destination, Ismail Sekandi, the executive director of the Uganda Hotel Owners Association, has warned.

"This tax is going to increase the occupancy cost." The hotel tax was introduced during the last financial year to cater for garbage collection and waste disposal. Its implementation is expected to commence in July

The tax is levied on hotels, lodges and recreation centres by city councils, town and municipal authorities to facilitate timely garbage collection and sewerage disposals.

Relevant Links East Africa Economy, Business and Finance Uganda

It is also intended to mitigate the gap left by the removal of Graduated Tax.

"In a three-star hotel in Kenya and Tanzania, who are our nearest competitors and have a comparative advantage over us, a room goes for between $50-$60 per night. The same room with nearly the same standards will go for $100-$110 in Uganda. That has already put us out of business," Sekandi explained.

"In an effort to promote tourism, such disincentives should not he introduced as they will increase operational costs for hoteliers who will push the expense to the final consumer, thus discouraging tourists from coming to Uganda," he concluded.

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