VAT to be charged on Up country Lodges effective 1st July 2014
- June 14, 2014
- Posted by: Africa Safaris
- Category: Travel News
Following the reading of the Budget for 2014/15, the minister of Finance decided to reinstate 18% VAT on all up country Hotels and lodges in Uganda. Government had introduced VAT in 2013 but was later suspended due to strong opposition from Tour Operators, Hoteliers and other tourism stakeholders reasoning that it was abrupt and would cause a loss on their side since they had sent quotes to their clients using rates with out VAT and that it was going to be very hard and up professional to go back to their clients with news quotes now including VAT. Others also reasoned that Uganda needs to invest in tourism marketing and infrastructure before thing about increasing taxes and making Uganda an expensive tourism destination compared to our neighbors Kenya and Tanzania.
With the introduction of VAT, it means that Uganda tour packages will have to increase due to the fact that all rates will have to be increased by 18%. When you look at other products such as Fuel which has been affected, it also implies that the cost of transport will as well go up. The government on the other hand is saying that we need to move to self reliance by raising funds from Ugandans and their businesses other than relying on foreign aid which has strings attached. Insiders also urge that following aid cuts due to corruption and anti homosexuality bill, the government has no option but charge heavy taxes on its subjects