Crushing Tax Burden Blamed for Slump in Tourism Service Standards

Tourism industry players have blamed the heavy tax burden on the sector for declining service standards, saying multiple levies are limiting investment in staff training and skills development.

Hotel owners say the industry is struggling with a persistent skills gap despite the establishment of the government-supported Hotel and Tourism Training Institute (HTTI) in Jinja.

Uganda Hotel Owners Association chairperson Susan Muhwezi said the sector faces as many as 27 different taxes, which significantly reduce profit margins and leave little room for employers to fund staff upskilling and international exposure programmes.

She said while exchange programmes with countries such as Austria, Kenya and other European Union states would enhance staff capacity and service delivery, most hotel operators cannot afford them due to the high tax regime.

The concerns come at a time when tourism has been identified by government as a key pillar in the country’s tenfold GDP growth strategy, with demand for hospitality services steadily increasing.

Yogi Birigwa, president of the Association of Uganda Tour Operators, said the industry still requires significant investment in human capital to compete regionally. She noted that many top managerial positions in local establishments, including hotel general managers and head chefs, are held by expatriates, particularly Kenyans.

While acknowledging the contribution of HTTI in training hospitality workers, Birigwa said client feedback continues to point to gaps in service delivery and capacity.

In response to the skills deficit, Kireyis Consultants Ltd recently conducted a five-day in-service training programme for 1,200 employees at Speke Resort Munyonyo.

Aloni Kireta, the firm’s director, said the training revealed weak teamwork between management and staff, which affects morale and overall performance. He urged hotel owners to prioritise continuous training, saying it improves efficiency, boosts employee confidence and enhances customer satisfaction.

Front office and housekeeping trainer Lilly Melabel Mugasha said structured training helps employees understand interdepartmental roles, improves communication and fosters collaboration, all of which contribute to better guest experiences.

Industry players now want government to review the tax structure imposed on tourism businesses to enable operators invest more in skills development and service excellence, arguing that without reforms, Uganda risks losing competitiveness in the regional hospitality market.