Tanzania tourism stakeholders up in arms over VAT

Professor Maghembe, Tanzania’s Minister for Natural Resources and Tourism, imposed a Value Added Tax (VAT), and tourism stakeholders are up in arms, who claim that this Value Added Tax will be counter-productive, coupled with the fact that the country’s government refused to join the common tourist visa for East Africa.

Last year’s arrival figures showed a decline, and it is anticipated that this will likely accelerate in view of a weaker world economy and the added cost burden inflicted on safari packages due to the Value Added Tax. Professor Maghembe was also criticized for his reported comments that a loss of income from hunting was to blame for the government’s decision to heap VAT on the sector with some commentators claiming Tanzania should long ago have abandoned the blood sport which one Kenyan conservationist known for her candid opposition of hunting called “immoral, unethical and unsustainable in this day and age.”

Private sector association leaders were understandably more guarded in their comments and wished not to be quoted nor their associations named as they feared that repercussions could be swift and harsh on them as individuals and collectively, going by past experience with whistleblowers in Tanzania.

Yet others challenged the Ministry to put on the table figures of arrivals of 2015 versus 2014 and the arrival data of the first four months of 2016 to allow an open comparison and be able to determine reasons for decline in arrivals.

Tourism stakeholders plan to lobby parliament to throw out the VAT on tourism services when taking votes on the budget, although given the majority of the ruling party is CCM in parliament, this may be easier said than done.