Tanzania safari and beach packages face higher cost through levy

HOTELIERS UP IN ARMS OVER YET MORE ADDED COST THROUGH TOURISM LEVY

(Posted 26th August 2013)

Tourism seems to become an easy punch bag in the region, apart from Rwanda that is, with governments heaping VAT on upcountry accommodation in Uganda, raising safari package cost by 18 percent for room and board in lodges, with Kenya and Tanzania adding VAT to a range of transport services hitherto not taxed for tourism operators, cognizant of tourism being an ‘invisible export’ and now news are breaking that Tanzania is attempting to add yet more charges on tourism products through a new levy.

The Ministry of Natural Resources and Tourism has served notice to the tourism sector that a 2 percent bed night levy will be charged and has to be remitted via the Tanzania Revenue Authority as of 01st September, leaving key stakeholder furious and vivid over this latest setback. ‘With all the tqx increased, park entrance is now subject to VAT and other elements too have been made VAT applicable, our packages are bound to become more expensive. What governments do not understand, despite telling them until they turn deaf – something which clearly happened here, pun intended – is the fact that we have longer term contracts and cannot change pricing because in turn tour operators in Europe are bound by consumer laws. Those laws dictate that once prices are published they must remain and travellers are not duty bound to pay any further supplements. That, if implemented, has to come from either the European tour operators pockets, very unlikely, or from our, making us lose money on each package we have sold. Combine that with negative publicity, over recent security concerns in Zanzibar to other areas where the same problems exist, to the less than adequate funding of tourism marketing and finally of course our reputation as one of the leading poaching countries in Africa. We are at a loss to understand what sections of government are actually up to. We will consult with our Minister (Ambassador Khamis Kagesheki) to see what can be done but are not hopeful this will change anything. We do not even know how the modalities are, the regulations and guidelines are still missing, so we don’t even know what to do, other than being told to pay up or else. September 01st is just days away and is shows how disorganized everything here is’ did a regular source from Arusha let fly when asked to shed some light on the new levy.

In Uganda, a tourism delegation went to see the parliamentary committee on budget matters and presented their projections and case studies of how serious an impact the untimely introduction of the VAT already had and continues to have on their businesses, hoping that parliament will eventually vote out such provisions in the budget proposals before finally passing the Finance Act 2013.

Watch this space for regular and breaking news from Eastern Africa’s tourism and hospitality industry.