State House, Entebbe — President Yoweri Kaguta Museveni has called for a rethink of how hotels are taxed in Uganda, arguing that tourism should be treated as an export industry and not subjected to the same tax regime as domestic businesses.
Speaking during a meeting with members of the Uganda Tourism Association (UTA) at State House Entebbe, the President expressed dismay upon learning that hotels—key pillars of the tourism sector—were taxed similarly to local consumer enterprises.
“Tourism is an export business because tourism is like the exports, it’s not an import,” President Museveni said. “You are exporting a service. Just like we export milk, we shouldn’t be taxing tourism the way we tax local products. This taxing of hotels is really not correct.”
The President admitted he had not previously been aware of the extent of the tax burden faced by hotels, and pledged to review the policy. “I was not aware that you are being taxed like that because this is an export. Mainly, it’s actually an export,” he added.
Beyond taxation, the President also criticized the reliance of tourism enterprises on commercial bank financing, pointing out that the high interest rates are unsustainable for a sector he views as strategically important.
“If factories don’t borrow from commercial banks, why do you want tourism businesses to do so? It’s not correct,” Museveni said. “You should be dealing with Uganda Development Bank (UDB). I’m going to take up all those issues. These are policy matters.”
UTA President Ms. Yogi Biriggwa led the delegation and made a formal appeal for structured government support. She requested Shs 800 million annually for the next three years to strengthen the association’s secretariat and implement institutional reforms aligned with Uganda’s Vision 2030.
“This funding will enable UTA to play its rightful role as the coordinating and unifying voice of the private sector in tourism,” she said, noting that the sector aims to grow annual tourism receipts to USD 4 billion by 2030.
President Museveni welcomed the proposal and promised a written directive after reviewing the full documentation.
Ms. Biriggwa also presented a positive outlook for the sector, citing a 13.1% increase in earnings to USD 1.52 billion and a 7.7% rise in international tourist arrivals, which hit 1.37 million. Domestic visits to national parks also surged by 15.7%, with Uganda now ranking 7th in Africa for Meetings, Incentives, Conferences and Exhibitions (MICE) tourism.
Despite this progress, she warned that access to affordable financing remains a significant bottleneck. Commercial interest rates range from 20% to 25%, while even subsidized lenders such as UDB and the Microfinance Support Centre offer rates as high as 16%.
“Tourism receives just 3% of all private sector credit. In 2023, we got only Shs 16.84 billion out of UDB’s Shs 610 billion disbursements,” she explained, noting a sector non-performing loan rate of 12.1%, more than twice the national average.
She also called for the tourism sector to receive at least 1% of the national budget, pointing out that while public funding has increased from Shs 289.6 billion in FY2024/25 to Shs 430 billion in FY2025/26, it still lags behind the sector’s 5% contribution to GDP.
On infrastructure, President Museveni said government is investing in air connectivity to boost access to key tourism sites.
“We are working on airports in Kidepo with the government of Sharjah, and in Kihihi. There’s also Kakuba for Murchison Falls, and Mweya has an airstrip that can be developed,” he said. “Tourists need to land close to their destinations. We shall fund this ourselves—Kasese, Arua, Kayonza, Kihihi, and Kidepo will be developed.”
The meeting, also attended by State Minister for Tourism Hon. Martin Mugarra Bahinduka, ended with the President committing to act on the policy concerns raised.
“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 concluded.
The meeting was also attended by Hon. Martin Mugarra Bahinduka, Minister of State for Tourism, Wildlife and Antiquities; Sarah Kagingo, UTA Board Director representing the Association of Ugandan Tourism 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 Uganda Tourism Association (UTA) Board; and Azhar Jaffer representing the Uganda Hotel Owners Association (UHOA).
Uganda Tourism Association (UTA) is the umbrella body of Uganda’s Tourism private sector associations.
