The bank of Tanzania in its latest economic review says that travel receipts rose by 11.0 per cent to $2.23 billion in December, as a result of increase in number of tourist arrivals.
Previously it was projected that tourist arrivals would decrease as the government in its 2016/2017 budget began to charge an 18 per cent valued added tax (VAT) on many previously exempt tourist services, including ground transportation, park fees, water safaris, guiding fees, camping fees and wildlife-viewing packages.
According to SafariBookings.com, an online marketplace for African safari tours that includes over 1,750 operators, the new tax has “caused chaos in the safari industry, forcing tour operators to charge clients up to 18 per cent extra for safaris that had already been paid.”
The Tanzania Association of Tour Operators (TATO) also expressed serious concerns on the cross-cutting negative consequences of the tax measures on the tourism industry, saying the move would cut down number of tourist arrivals hence affect revenue collection.
Currently, the Hospitality Industry is stated to be paying over 50 different taxes, levies and charges.
Tanzania Tourism is the number one Foreign Exchange Earner for the country, having contributed over $2 billion in the year ending February 2015.
The industry employs one third of the country’s’ labour force (direct and indirect).
Tourism Stakeholders believe that Tanzania tourism can grow double digits between now and 2025, “if the government would only nurture this strategic industry instead of consistently wanting to stifle it in the name of revenue collection.”