10 dollar tax on flying-out passengers is a wise move
I wish to commend Parliament of Uganda for taking good steps to boost our country’s revenues.To remind fellow readers of The Sunrise, this week passed recommendations of one of its committees – i.e the one on Trade and Industry on introducing a 10 dollar charge on all departing passengers using air transport.
When critically analysed, the measure is a smart move by Parliament to try to boost Uganda’s economy that has been battered by the COVID-19 pandemic.
It is a smart move in many ways. The first and perhaps most important is that it helps to mobilise revenue without hurting tourism. It does not hurt tourism because it targets not those that come into the country but instead those that leave the country. As those with knowledge of the airline industry will tell you, tourists mostly come here on return tickets. Meaning they had already purchased their ticket from their home countries.
But the second good reason is that majority of departing Ugandans actually don’t buy the tickets themselves – so they don’t feel the impact themselves. It is true that many of the outgoing airline passengers these days are Ugandans going to work as maids and security guards in the Arab World, and their future employers are the ones who usually pay the air tickets. This is therefore a smart way for the government to make money from the Arabs for employing Ugandans even before they have started working.
Thirdly, a considerable group of exiting air passengers are government officials and the corporate class whose travel bill is mostly shouldered by their employers.
The fourth reason is that airline travel these days is out of necessity and not a luxury. This means that the tax would not significantly affect the decision-making of an individual whether or not to travel. People only travel for important causes and would therefore not be hindered by a slight increase in the ticket price.
The fifth and equally very important advantage of the tax, is that mechanisms have been put in place to create a separate account to keep the money in Post Bank for purposes of being ploughed back into the tourism sector. Whereas deciding who benefits from this fund might prove a headache, at least the money would have been created upon which a fight starts.