President Museveni has come out strongly against the taxation of hotels, saying the tourism sector is an export industry that should not be burdened with domestic-style taxes.
Meeting a delegation from the Uganda Tourism Association (UTA) at State House Entebbe, the president expressed concern upon learning that hotels which he called the backbone of tourism were being taxed similarly to local consumer businesses.
“Tourism is an export business because tourism is like the exports, it’s not an import, it’s an export,” the president said.
“You are exporting a service, like we are exporting milk. Me, I am a man of milk as you know, so our milk is going out and other products. And we don’t tax exports. So, this taxing of hotels the way you are talking about is really not correct.”
He added that he had not been aware of the current tax burdens affecting hotels.
“I was not aware that you are being taxed like that because this is an export. Mainly, it’s actually an export. So that’s number one,” he said.
The president also took aim at the way tourism businesses are being financed, arguing that the sector should not be expected to operate on commercial loans.
“Because it’s an export, it should not be relying on money from commercial banks for business, it should be relying on UDB, just like factories,” he said.
“If factories don’t borrow from commercial banks, why do you want tourism businesses to borrow from commercial banks? How will they succeed? It’s not correct, you should be dealing with UDB. I am going to take up all those because those are policy issues, they are not money issues. It’s a matter of proper understanding and classification.”
The meeting followed a request from UTA President Yogi Biriggwa, who appealed for structured support, including direct funding of Shs 800 million per year for the next three years to strengthen the association’s secretariat and implement priority reforms.
“We respectfully request Shs 800 million annually for the next three years to strengthen the UTA Secretariat and implement priority institutional interventions,” she said.
The president welcomed the proposal and promised to take action.
Biriggwa also presented a sector snapshot, noting that Uganda’s tourism industry is rebounding strongly following the COVID-19 shock, thanks to what she described as deliberate efforts by the president, the government, and the ministry of Tourism, Wildlife and Antiquities.
Tourism earnings grew by 13.1% to $ 1.52 billion between March 2024 and March 2025.
She said that tourist arrivals rose by 7.7% to 1.37 million, while domestic visits to national parks increased by 15.7%. Uganda now ranks 7th in Africa for MICE tourism, boosted by investments such as the new Speke Resort Convention Centre.
According to UTA’s findings, tourism receives just 3% of all private sector credit, and in 2023, the sector received only Shs 16.84 bn, just 1.3% of Uganda Development Bank’s Shs 610bn in disbursements.
Museveni committed to reviewing the UTA’s recommendations and addressing the broader policy gaps.
“I am going to take up all those because those are policy issues. Tourism is an export, and we should treat it that way.”
