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GOVERNMENT DEFAULT ON TRAVEL AGENTS AND SUBSEQUENT DECISION TO TICKET DIRECTLY FROM AIRLINES

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07 June 2018

Quick facts about the Air ticketing business in Uganda.

The Air ticketing business world over is conducted through agents, who work as intermediaries between the Airline and the travelers, through this method a foreign airline is able to create employment indirectly in the countries where they fly. In Uganda there over 400 travel agents, employing over 4000 (Four Thousand) people directly majority of whom are women and youth.

The air ticketing agents have contributed in this financial year ending 2017/2018 UGX 5 billion, in Pay as you earn (PAYE ) tax, UGX 3 billion in corporation tax to the government confers and UGX 2.5 billion as NSSF remittances of the Ugandans working in this industry.

INSPITE OF THIS, THE GOVERNMENT OF UGANDA OWES/ IS INDEBTED TO THE TRAVEL AGENTS TO A TUNE OF UGX 4.5 TRILLION SHILLING OR 1.3 BILLION DOLLARS , it is absurd  that after government has consumed the services using a travel agency and failed to pay , it is now finding a new window to deal with airlines directly.

Reference is the letter dated 28th May, 2018, from Public Procurement and Disposal of Public Assets Authority (PPDA) and corresponding directive from Permanent Secretary /Secretary to Treasury, Ministry of Finance Planning and Economic Development, copied to Parliament , Prime Minister offices dated 15th February,2018.

The circular on finalization of the detailed budget estimates and Ministerial Policy statements for financial year 2018/2019, in Paragraph 37 Permanent Secretary/Secretary to the Treasury, Ministry of Finance, Planning and Economic Development, directed that all accounting officers effective financial 2018/2019 shall procure Air tickets from Airlines companies only.

Further to that above Kampala Capital City Authority (KCCA) invited bids for supply for PROVISION OF AIR TICKETING SERVICES UNDER PROCUREMENT REFERENCE KCCA/NCONS/18-19/00542 and indicated that ( ONLY AIRLINE COMPANIES ARE INVITED TO BID)

This action is a betrayal, totally disenfranchising Ugandans and condemning them to abject poverty and slavery in their own country. One wonders whether we have a coherent alignment of Government action and the nations strategies which we sing every day, "Transformation of Uganda from a peasant to modern and prosperous economy in 30 years, Strengthen Uganda’s competitiveness for sustainable wealth creation, employment and inclusive growth. Increasing income and promoting equity."

In our observation, the directive is a total contravention of the principle of equity, empowerment of the nationals, discriminatory and serves to adversely affect and ultimately, kill one of the main stems of the tourism value chain which is the leading sector in contributing to national budget and employment. This is because there is no sector which can replace the 4,000 jobs which shall be lost, and the billions of tax revenue government will lose by implementing the directive.

On behalf of The Uganda Association of Travel Agents (TUGATA) and entire the tourism private sector under our umbrella body, Uganda Tourism Association (UTA), we condemn this un-researched, malicious and counter-productive directive, which is contrary to national interests and reverses the notion of a private sector led economy.

In the absence of a National Carrier, The Government will only serve to enrich the owners of these Airlines, who are not Ugandans and have very many markets where they generate revenue as opposed to Uganda Travel agents

 

Our request:

  1. Pay all the outstanding obligations due to travel agents immediately.
  2. Government with immediate effect suspends/ withdraws this directive of purchasing airtickets direct from the airlines
  3. We demand that a thorough empirical study is done to establish the impact of this directive, to the national interest, Jobs, equity, fair business competition and nationalism.Agents under their Association, have an intention to sue the Government for the unpaid air tickets which have been supplied to the various Government Ministries and Agencies.

PEARL HOAREAU- KAKOOZA | PRESIDENT UGANDA TOURISM ASSOCIATION (UTA) / CHAIRPERSON, THE UGANADA ASSOCIATION OF TRAVEL AGENTS (TUGATA)

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