In line with government policy to support investment in the development of five star hotels, Kingdom Kampala has been granted tax incentives.
The Ruparelia Group is embarking on the second phase of the Kingdom Kampala project. A multi-use office tower was opened two years ago and a five star hotel is on the cards. The government incentive has come in handy for the group already known for excellence in hospitality with their current flagship being the Commonwealth Resort in Munyonyo.
In a July 13 letter to the Commissioner General of Uganda Revenue Authority, Finance Minister Matia Kasaija informed the tax body that the development of the five star hotel will not attract Value Added Tax as stipulated in the VAT amendment act that waives the tax for investments in hotel and tourism facilities that have a $8m investments and or 100 plus room capacity. Excise duty and stamp duty are also waived.
Also, Kasaija quoted the EAC Customs act 2004 that indicates that “any of the following goods engraved or printed or market with the hotel logo imported by a licenced hotel for its use i.e washing machines, kitchen ware, cookers, fridges and freezers, air conditioning systems, cutlery, televisions, carpets, furniture, linen and curtains, gymnasium equipment are exempt from all taxes.”
In accordance with the legal notice No. EAC/118/2021 S/N. 1, Kingdom Kampala Hotel is exempted from import duty until 30th June 2022. However, Kasaija gave several conditions including the materials being imported for exclusive use for the construction of the hotel, the bills of quantities must be commensurate to status of construction of a five star hotel, and that URA and other government agencies shall be allowed unconditional access to the site and stores during working hours.
Kasaija indicates that the materials cannot be transferred to another entity among other conditions. In case of breach, all taxes and duties will be paid.
“The purpose of this letter is to inform you and request you to facilitate Kingdom Kampala to access the incentives elaborated above subject to URA’s verification of the investment and fulfilment of the terms and conditions for accessing the incentives,” Kasaija wrote.
Upon completion, Kingdom Kampala will have have 200 rooms including suites and penthouses and 35 conference rooms.
The hotel will also have 226 “very very high end apartments,” according to developer Sudhir Ruparelia.