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Tourism

President Museveni Calls for Tax Relief for Hotels, Amidst Growing Tourism Sector

Strategic Insights

— 2 min read

President Yoweri Museveni has urged for the removal of taxes on hotels, framing the tourism sector as an export industry deserving a favorable tax environment. Speaking at State House Entebbe, the President emphasized that tourism generates foreign exchange like goods sold abroad, and should therefore benefit from a tax-friendly policy. Museveni also criticized the commercial bank loan model for tourism enterprises, advocating for accessible credit from the Uganda Development Bank (UDB) like industrial ventures.

Key Takeaways:

  • The tourism sector in Uganda is experiencing a strong recovery from the COVID-19 downturn, with earnings rising 13.1 percent to $1.52 billion in the 12 months to March 2025.
  • Tourism earnings have been increasing steadily, with a growth rate of 13.1 percent, surpassing the $1.5 billion mark for the first time.
  • The Ugandan government has allocated Shs430 billion in FY2025/26 for supportive infrastructure such as roads, ICT, and security to complement the sector's growth.
  • Despite this, the tourism sector receives only 3 percent of private sector credit and accounts for just 1.3 percent of UDB's disbursements in 2023.
  • Commercial lending rates for tourism enterprises range from 20 to 25 percent, while government-supported institutions offer rates between 12 and 16 percent.
  • The Ugandan Development Bank (UDB) is expected to offer affordable credit to tourism enterprises, similar to industrial ventures, to address the issue of high financing costs constraining growth.
  • The Uganda Tourism Association (UTA) President, Yogi Biriggwa, has proposed Shs800 million annually over three years to strengthen the association's Secretariat and drive priority reforms.
  • Public funding for tourism has been increasing, rising from Shs289.6 billion in FY 2024/25 to Shs430 billion in FY 2025/26.
  • The tourism sector contributes approximately 5 percent to Uganda's GDP, yet it receives less than 1 percent of the national budget.

Statistics:

  • Tourism earnings in the 12 months to March 2025: $1.52 billion (13.1% growth)
  • Tourist arrivals: 1.37 million (7.7% growth)
  • Domestic visits to national parks: 15.7 percent growth
  • Commercial lending rates for tourism: 20-25%
  • UDB's disbursements in 2023: $1.3 billion (tourism sector accounts for 1.3%)
  • UDB credit allocation to tourism in 2023: 3 percent
  • Public funding for tourism in FY2024/25: Shs289.6 billion
  • Public funding for tourism in FY2025/26: Shs430 billion
  • National budget allocation to tourism: Less than 1 percent
  • GDP contribution of the tourism sector: Approximately 5 percent

Sources:

  • "Museveni urges removal of taxes on hotels, calls for policy change," Uganda Daily Monitor, March 2025
  • "Tourism industry recovers strongly from COVID-19 downturn," Uganda Daily Monitor, March 2025
  • "Uganda Development Bank (UDB) to offer affordable credit to tourism enterprises," Uganda Daily Monitor, March 2025
  • "Uganda Tourism Association (UTA) President Yogi Biriggwa's proposals," Uganda Daily Monitor, March 2025
  • "Public funding for tourism rising to Shs430 billion in FY2025/26," Uganda Daily Monitor, March 2025

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