(Posted 20th January 2023)
The Tanzania Revenue Authority (TRA) has directed an 18% VAT on private charters operating within the United Republic of Tanzania effective from 1 January 2023.
(Taxman gone bonkers?)
To be in compliance with this new law will airlines operating in Tanzania apply VAT to the relevant private charters operated so far this year and to all new quotes effective January 20, 2023.
It is important to note that private charters operating under the below conditions are termed as EXPORTED SERVICES and therefore EXEMPT from the newly introduced VAT:
(a) from a place outside the United Republic to another place outside the United Republic;
(b) from a place outside the United Republic to a place in Mainland Tanzania; or
(c) from a place in Mainland Tanzania to a place outside the United Republic;
Tourism sources in touch with www.ATCNews.org are up in arms over this latest move to use tourism as a milking cow and have sharply condemned the tax demands, saying that it will further outprice Tanzania safaris from their closest competitors and impact on visitor numbers. Said one regular contributor on condition of anonymity: ‘Demanding such tax backdated by 20 days is simply bad for business. Just imagine what agents abroad will have to say, especially those whose quotations to clients are fixed and cannot be changed. Who will pay this extra cost? Advance notice, close consultation with the industry and working hand in hand is obviously alien to TRA!‘
ATCNews will monitor the situation and as and when data become available about the impact of these fiscal measures will further report updates.
