President Yoweri Kaguta Museveni has come out strongly against the taxation of hotels, saying Uganda’s tourism sector should be treated as an export industry rather than a domestic consumer business.
Speaking during a meeting with a delegation from the Uganda Tourism Association (UTA) at State House Entebbe, the President said taxing hotels as though they were local enterprises was misguided. UTA is the umbrella association that brings together tourism associations in Uganda.
“Tourism is an export business because you are exporting a service — just like we export milk or other products,” President Museveni stated. “And we don’t tax exports. So this taxing of hotels the way you are talking about is really not correct.”
The President expressed surprise that hotels — which he described as the backbone of Uganda’s tourism industry — were bearing a similar tax burden to local retail businesses, saying he had not been aware of this policy oversight.
He also called for a review of how tourism enterprises are financed, arguing that businesses in the sector should not be relying on commercial loans with high interest rates.
“Because it’s an export, it should not be relying on money from commercial banks,” he said. “It should be relying on Uganda Development Bank (UDB), just like factories. If factories don’t borrow from commercial banks, why do you want tourism businesses to borrow from commercial banks? It’s not correct.”
The President promised to issue written instructions after fully reviewing the proposals submitted by UTA.
UTA Seeks Structured Support and Policy Reforms
UTA President Ms. Yogi Biriggwa presented a formal request to the President, seeking Shs 800 million annually for three years to strengthen the association’s Secretariat and implement institutional reforms.
“This funding will enable UTA to play its rightful role as the coordinating and unifying voice of the private sector in tourism,” she said, aligning the proposal with the National Development Plan IV and Uganda’s target of reaching USD 4 billion in annual tourism revenue by 2030.
Biriggwa presented a positive outlook for the sector, citing recent government efforts and improvements in performance. According to data from the FY2025/26 Budget Speech, tourism earnings rose 13.1% to $1.52 billion by March 2025. Tourist arrivals increased 7.7% to 1.37 million, while domestic park visits jumped by 15.7%. Uganda now ranks 7th in Africa for Meetings, Incentives, Conferences and Exhibitions (MICE) tourism.
However, she warned that high interest rates and limited access to credit continue to hold the sector back. Commercial loans range between 20%–25%, while even government-backed lenders such as UDB and the Microfinance Support Centre charge 12%–16%. She said tourism receives only 3% of all private sector credit and accounted for just 1.3% of UDB’s Shs 610 billion disbursed in 2023.
Tourism’s non-performing loan rate currently stands at 12.1%, more than twice the national average.
On public funding, Ms. Biriggwa acknowledged progress — including a rise in the tourism budget from Shs 289.6 billion in FY2024/25 to Shs 430 billion in FY2025/26 — but argued that the sector still receives less than 1% of the total national budget, despite contributing around 5% to GDP.
To address this imbalance, UTA proposed raising direct government funding to at least 1% of the national budget to support destination marketing, product development, quality assurance, and skilling.
President Promises Infrastructure Development
On the issue of accessibility to tourism hotspots, President Museveni highlighted ongoing efforts to upgrade infrastructure, particularly regional airports.
“We are working with the government of Sharjah to build an airport at Kidepo. In Kihihi and Murchison Falls, there are airstrips that can be upgraded. Even Mweya has one. Kasese, Arua, Kayonza, Kihihi — these are all areas where we can improve direct access,” he said.
The President concluded the meeting by assuring the delegation that their policy concerns would be reviewed and addressed.
“I am going to take up all those because those are policy issues. Tourism is an export, and we should treat it that way,” Museveni said.
The meeting was also attended by Hon. Martin Mugarra Bahinduka, Minister of State for Tourism, Wildlife and Antiquities; and Sarah Kagingo, UTA Board Director representing the Association of Ugandan Women in Tourism and Trade (AUWOTT), and Vice Chairperson of the Board of the Private Sector Foundation Uganda (PSFU).
Other participants included Peter Kaggwa from the Uganda Association of Conference and Incentive Industry (UACII); Isa Kato from the Association of Uganda Tour Operators (AUTO); Edwin Nsababuhoro, Technical Advisor to the UTA Board; and Azhar Jaffer representing the Uganda Hotel Owners Association (UHOA).
