By Andrew Irumba Katusabe
President Yoweri Kaguta Museveni has sharply criticised the prevailing taxation model imposed on Uganda’s hotel sector, arguing that it fundamentally misunderstands the nature of tourism as an “export industry.” During a strategic policy dialogue held at State House Entebbe with the Uganda Tourism Association (UTA) on Tuesday, the President called for a realignment of fiscal and financial policies to unlock the full economic potential of the sector.
“Tourism is an export business because you are exporting a service — just like we export milk or other products. And we don’t tax exports. So this taxing of hotels the way you are talking about is really not correct,” Museveni asserted.
In a tweet posted shortly after the meeting, the President elaborated on his engagement with the UTA leadership, particularly highlighting his aversion to commercial bank loans for tourism businesses:
“I met with the Uganda Tourism Association, led by Ms. Yogi Biriggwa, who outlined plans to position Uganda as a top global tourism destination. I advised against relying on profit-driven banks, suggesting the UDB instead. Tourism needs supportive policies, not just funding, but proper classification and planning.”
“With oil revenues, we’ll invest in key infrastructure, like airports, to enhance access to our natural attractions. The government will collaborate with industry stakeholders to maximise tourism’s economic potential.”
UTA’s Institutional Reform Proposal and Financial Plea
UTA President Ms. Yogi Biriggwa presented a detailed roadmap, requesting UGX 800 million annually for three years to fortify UTA’s Secretariat and implement strategic reforms. This proposal is embedded within the framework of the National Development Plan IV (NDP IV) and aims to elevate Uganda’s tourism revenue to USD 4 billion by 2030.
Key highlights from her presentation included:
- Tourism earnings increased by 13.1%, reaching USD 1.52 billion as of March 2025.
- International tourist arrivals rose 7.7%, totaling 1.37 million visitors.
- Domestic park visits grew by 15.7%, signalling increased local participation.
- Uganda ranked 7th in Africa for Meetings, Incentives, Conferences and Exhibitions (MICE) tourism.
- The sector’s non-performing loan rate stands at 12.1%, double the national average.
- Only 3% of all private sector credit goes to tourism, and it received just 1.3% of UDB’s UGX 610 billion disbursed in 2023.
- Commercial loan rates are between 20%–25%, while UDB and Microfinance Support Centre charge 12%–16%.
- Despite contributing 5% to GDP, the sector still garners less than 1% of the national budget — though the FY2025/26 allocation rose from UGX 289.6B to UGX 430B.
Biriggwa urged government to raise the sector’s funding to at least 1% of the national budget, targeting destination marketing, product development, quality assurance, and skills development.
Infrastructure Enhancements to Boost Regional Connectivity
Addressing challenges of accessibility, Museveni confirmed ongoing bilateral cooperation with the Sharjah government to construct an airport at Kidepo Valley National Park. He also mentioned existing airstrips in Mweya, Kihihi, Murchison Falls, Arua, Kayonza, and Kasese that could be upgraded to facilitate direct access to tourism hubs.
“We are working with the government of Sharjah to build an airport at Kidepo… Even Mweya has one. Kasese, Arua, Kayonza, Kihihi — these are all areas where we can improve direct access,” the President noted.
He assured the delegation that their concerns would be addressed at policy level, reaffirming his stance that tourism enterprises must be treated with the same strategic investment logic as industrial exporters.
The high-level meeting featured:
- Hon. Martin Mugarra Bahinduka, Minister of State for Tourism, Wildlife and Antiquities
- Sarah Kagingo, UTA Board Director (AUWOTT) & Vice Chairperson of PSFU
- Peter Kaggwa, Uganda Association of Conference and Incentive Industry (UACII)
- Isa Katto, Vice president Association of Uganda Tour Operators (AUTO)
- Edwin Nsababuhoro, Technical Advisor, UTA Board and a professor at Penn State University
- Azhar Jaffer, Uganda Hotel Owners Association (UHOA) and managing Director Fairway group of Hotels. With Museveni’s renewed commitment, tourism players are cautiously optimistic that long-overdue reforms in fiscal policy, public investment, and financing architecture may soon materialize, positioning Uganda as a competitive global destination.
