Government Bans Travel Agents Services Over Shs 4 Trillion Debt

BY: Eyalama In Business On

Commencing with the new Financial Year, 2018/19, ordered Mr Keith Muhakanizi, the Secretary to the Treasury, all government officials traveling abroad will purchase their air tickets directly from airline companies and not travel agencies.

Muhakanizi’s February 15th directive to all accounting officers and heads of state enterprises is in line with an earlier directive from Prime Minister Dr Ruhakana Rugunda in January, aimed at restricting the excessive expenditure on foreign trips by government officials.

The decision however, comes after government reportedly accumulated over Shs. 4.5Trillion in debt to local travel agents.

This is according to the Uganda Association of Travel Agents (TUGATA), which unites over 100 Travel Agent companies in the country.

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“It is absurd that government consumed the services using travel agencies and failed to pay, and is now finding a new window to deal with airlines directly,” said Ms Pearl Kakooza, the Chairperson TUTAGA.

Travel Agent companies work as intermediaries between the airlines and the travelers, by selling tickets to the latter and charging a small commission.

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In a country like Uganda that has no national airline, and with a single destination (Entebbe Airport) to very few airlines, travel agent companies often come in handy.

About 4000 Ugandans, mostly women and youths are employed directly in this business according to Ms Kakooza.

She adds that these air ticketing agencies in this ending financial year alone, contributed up to Shs 8Billion in taxes and another 2.5Billion as remittances to NSSF.

The decision by government to stop using their services, which could put hundreds of Ugandans out of work, Kakooza said, came in as a shock.

Speaking to Chimpreports on Thursday on phone, the TUGATA chairperson confirmed that Government of Uganda indeed owes the travel companies more than Shs 4.5 Trillion or USD 1.3Billion.

One of the companies, she said was owed over half a million US Dollars by government.”

“Our services are consumed in US dollars. One of my agents says the government owes her $555,000,” she said. “We actually went and double checked these figures and found that they are accurate.”

“We are basically funding Government of Uganda’s travel. We use our own money, which is mostly borrowed money, which as you know is not cheap. We pay IATA (an international aviation body which licenses the Travel Agent companies) every two weeks: on 15th and 30th of every month. Imagine the strain that is for a company that’s heavily dependent on government travel.”

Mrs Kakooza told us that the Shs. 4.5 Trillion that government owes to the company goes as far back as 5 years.

“What government does is; a government body will go to one agency and get its services on credit up to about $100,000, then they’ll run away and go to another agent, also run out credit there and go to the third agent. That is exactly how government operates.”

Our efforts to get confirmation of these figures from the Finance Ministry were futile as the Permanent Secretary Mr Muhakanizi did not return our calls.

The Ministry Spokesperson Jim Mugunga told us he was not aware of the 4.5trillion Shilling debt, advising that we contact the government spokesperson.

The Finance Ministry directive banning travel agent services is already taking effect in some government department

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