PRESS RELEASE: Monday 23rd June 2014
BYAMUKAMA BONIFENCE – CHAIRMAN LOBBY COMMITTEE, UGANDA TOURISM ASSOCIATION
Uganda Tourism Association is the apex body of the private sector tourism associations in Uganda. UTA has a membership of the major tourism associations like Association of Uganda Tour Operators Association (AUTO), Uganda Hotel Owners Association (UHOA), Uganda Safari Guides Association (USAGA), The Uganda Travel Agents Association (TUGATA) and Uganda Community Tourism Association (UCOTA).
The tourism sector is one of the fastest growing sectors in Uganda at an annual growth rate of 21%.
According to the World Travel and Tourism Council (WTTC), tourism is;
> One of the country’s leading foreign exchange earners and it employs over 500,000 people (directly & indirectly) majority of whom are women and youths.
> Every Tourist arrival creates 2 jobs.
According to World Tourism and Travel Council (WTTC) forecasts for 2022, the tourism sector in Uganda is expected to:-
> Have attracted capital investment of UGX 494.5bn in 2011, which is expected to rise by 6.1% pa over the next ten years to UGX922.2bn.
> Support 715,000 jobs by 2022 (7.2% of total employment), an increase of 3.1% pa over the period
> Tourist arrivals are forecast to total 1,907,000, generating expenditure of UGX3, 767.4bn, an increase of 4.9% pa.
Tourist Arrivals by purpose of visit
Table below shows that, the majority of tourists arrivals came into the country to visit friends and Relatives followed by those for business and professional conferencing and then leisure, recreation and holidays. The category ‘others’ includes travelers in transit, those engaged in temporary employment and short-term contract / consultancy etc
The number of nonresident arrivals that came into the country for leisure, recreation and holidays increased from 144,000 to 148,000 representing 3 percent increase between 2009 and 2013.
Tourist Arrivals by purpose of visit (‘000s), 2009 – 2013
Purpose 2009 2010 2011 2012 2013
|Leisure, recreation and holidays||
|Business and professional||
|Visiting friends and relatives||
Visitor to National Parks (000’s), 2009-2013 – Source: Uganda Bureau of Statistics
Tourism Expenditure (USD Million)
Year 2009 2010 2011 2012 2013
In-bound Tourism 564 662 805 834 979
The proposed new VAT 18% tax imposed on upcountry accommodation facilities will lead to losses by Tour Operators / hoteliers who have already sent out itineraries/ pricing to their intending clients and it is impossible to revise the rates quoted, this may also lead to reduced number of tourists due to cancellations after the increase is imposed on them.
Please note that a confirmed safari is a contract between the destination tour operator and the agent abroad. The rate quoted cannot be changed as per the law.The Tourism Sector should be Zero rated since we already pay VAT on water and fuel.
According to our calculation based on ten days safari, the vat put on upcountry hotel increases the cost by US$1,000 for a couple (US$500 per person) travelling to Uganda and an additional US$1,000 for based on 10% Bank Charge /wire transfer for transfer of US$10,000 transfer.
The tourist is already paying over US$1,000 in terms park fees and other park activities, hotels in Kampala ,restaurants, drinks (along the entire value chain).
Ush 5 Billion was allocated to Uganda Tourism Board for marketing and we thank Government. However, we would like to that this amount is minimal and cannot meet the marketing gap of Uganda as a country. It is with the above that we urge government to have a paradigm shift in the way they look at tourism. Tourism as an Export, government should consider increasing allocation of funds to the tourism sector for purposes of marketing and working on infrastructure like tourism roads such as the circuit around Bwindi Forest among others. As a result of poor roads, our vehicles are badly hence a big challenge to the sector players.
Uganda stands to lose if Government goes ahead o implement VAT on upcountry hotels because most of the tourists will cancel.
For God and my country
On the same issue of VAT, Susan Muhwezi the Chairperson Uganda Hotel Owners Association (UHOA) and Vice Chair of Uganda Tourism Association Lobby Committee had this to say; “as we struggle to promote Tourism which is an invisible Export – that is growing by leaps and bounds, why can’t those in Finance , Parliament see it and avoid strangling a sector in it’s infancy” .
Power costs are high, Hotels & lodges are still empty yet they have to meet all the utilities, pay workers, pay taxes in different forms and many other things” Susan dded.