Tour Operators Insist Government Must Scrap VAT On Hotels

The Association of Uganda Tour Operators is continue lobbying government to drop the Value Added Tax imposed on upcountry hotels and lodges.

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While presenting the 2014/15 budget estimates, Maria Kiwanuka, the Finance, Planning and Economic Development minister announced plans by government to terminate the VAT exemption for upcountry hotels and lodges.

The proposal didn’t go down well with tour operators who accused government of being insensitive to the sector. The operators have been engaging government since then over the matter.

Recently, the operators met Frank Tumwebaze, the presidency minister but details of the meeting have not been made public.

Barbra Vanhelleputte Adoso, the President of Association of Uganda Tour Operators-AUTO says they will not get tired of engaging government to ensure the VAT is scrapped.

She says the decision by the government to levy VAT on hotels and lodges is unfair in addition to the fact that Uganda is already a very expensive tourist destination.

She says after giving the sector about a year, government has reneged on its promises, which might kill the industry.

Adoso says government should have instead increased on the incentives to attract more players since tourism is still a young sector. She says imposing VAT means all the value chain in the sector will be affected.

She says most of the roads leading to the national parks and other tourism sites are in poor state and government must do more on developing such roads other than taxing the little revenue generated.

Adoso says with this, Uganda will never surpass the other competing countries that have better facilities.

She has challenged the government to show cause why the players must not complain over the inclusion of Value Added Tax in the 2014/15 budget;

Officials from the Trade ministry have not yet responded to the latest demands. A month ago, the President of Uganda Tourism Association, Herbert Byaruhanga said he would lead a delegation to statehouse to meet the president over the same.

He has not confirmed when the meeting will take place. At the time, he said the meeting would be held to ensure that VAT is scrapped off so that Uganda does not become a very expensive destination for tourists.

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