(Posted 15th June 2025)
The Tourism Confederation of Tanzania (TCT), the umbrella body representing private sector investments across the entire tourism value chain, expresses deep shock and disappointment at the significant budget cuts proposed in the 2025/26 National Budget Speech delivered by the Honorable Minister of Finance. Tourism remains Tanzania’s leading foreign exchange earner, generating USD 3.9 billion in 2024 and supporting over 2.57 million jobs. Yet, the allocation to the Natural Resources, Environment, and Tourism sector has been slashed by 46.75%, from TSh 596.1 billion in 2024/25 to TSh 317.4 billion in 2025/26.
This cut contradicts the government’s stated goals of building a well-resourced, green, and inclusive economy. It undermines the long-term sustainability of the ecosystems and wildlife that are the foundation of Tanzania’s global tourism competitiveness.
Key Concerns
• Nature-based tourism accounts for over 70% of Tanzania’s tourism product—safaris, protected areas,
beaches, and cultural heritage.
• While neighboring countries are increasing investments in park infrastructure, conservation
enforcement, and climate resilience, Tanzania is regressing.
• The Defense and Public Order sector is allocated TSh 6.4 trillion, more than 20 times the tourism
allocation, despite tourism’s proven contributions to rural development and foreign exchange.
• Revenue-sharing frameworks with communities under WMA bylaws are underfunded and
inconsistently implemented.
• Although 50% of the Tourism Development Levy (TDL) is directed to MNRT and 50% to the Treasury,
the Budget Speech offers no precise mechanism for transparent reinvestment into frontline
conservation or destination marketing.
Meanwhile, the government has quickly implemented new tourist charges, such as the mandatory USD 44 travel insurance for non-residents under the Insurance Act (CAP 394), but has not matched this with
reinvestment into the attractions that drive tourist arrivals. This imbalance risks undermining the very base of the tourism economy.
AFCON 2027: Disconnect Between Infrastructure and Sector Readiness
The Budget rightly celebrates Tanzania’s co-hosting of AFCON 2027, with TSh 458.3 billion allocated for stadium infrastructure. However, there is no matching provision to support tourism businesses, responsible for hosting, transporting, and servicing the regional and global influx of visitors.
Instead:
• A 10% withholding tax on retained earnings discourages tourism businesses from reinvesting in
upgrades, expansions, or staffing, especially harmful for capital-intensive, seasonal sectors.
• The mandatory travel insurance fee makes Tanzania a less competitive destination among co-hosts.
• Foreign exchange controls prevent operators from quoting and settling in USD/EUR, which is critical for pre-bookings and packaged group tours.
• There is no increased budget for the Tanzania Tourist Board to promote the country as an AFCON
destination through trade fairs or global campaigns.
Taxing Reinvestment: Tanzania as a Regional Outlier
The proposed 10% withholding tax on retained earnings, applied six months after declaration, would raise the effective tax on reinvested profits to nearly 40%. This policy penalizes businesses that retain earnings for long- term investment, operational buffers, or capital upgrades.
By contrast, no regional competitor taxes retained earnings:
Country Corporate Tax Withholding on Retained Profits
Tanzania 30% 10% (proposed)
Kenya 30% 0% (only on declared dividends)
Uganda 30% 0% (only on declared dividends)
Rwanda 30% 0% (only on declared dividends)
Tanzania risks becoming the only country in the region that disincentivizes reinvestment, threatening job creation, upgrades, and linkages in anticipation of AFCON 2027.
Misalignment with FYDP III and Vision 2050
The proposed budget is inconsistent with the priorities outlined in Tanzania’s Third Five-Year Development Plan (FYDP III), which positions tourism as a transformative sector for job creation and rural development.
It also contradicts Vision 2050, which champions ecological sustainability and inclusive green growth. For tourism to fulfil its envisioned role, it must be strategically elevated, not fiscally marginalized.
Protecting the Ethical Foundations of Tanzania’s Wildlife Legacy
Alongside fiscal neglect, there is rising concern over the ethical deterioration in some segments of wildlife tourism. Practices such as the commodification of wildlife, the growth of petting zoos, and the confinement and overfeeding of animals for curated photo opportunities pose serious threats to animal welfare and Tanzania’s conservation reputation.
These trends—sometimes marketed at trade fairs and online under the national tourism brand- violate the conservation principles articulated by Mwalimu Julius Nyerere and diminish the values that have historically underpinned Tanzania’s identity as a responsible eco-tourism leader.
TCT urges a national dialogue to address the growing ethical gap in tourism operations. A failure to uphold conservation ethics risks eroding international confidence, alienating core markets, and weakening the very pillars upon which sustainable tourism is built.
We encourage the government and private sector alike to publicly reaffirm Tanzania’s conservation values and ensure they are embedded in both budgetary decisions and regulatory frameworks moving forward.
A Call for Reconsideration
TCT urges the Government of Tanzania, particularly the Ministry of Finance and the Ministry of Natural
Resources and Tourism, to urgently:
1. Recognize tourism as a national development pillar, given its contributions to GDP, employment, and
rural empowerment.
2. Mobilize 3–5% of total tourism earnings by ring-fencing existing sources (TDL, Bed Night Levy) into a
National Conservation Trust Fund (CTF). As outlined in TCT’s June 2025 policy proposal, this could yield over USD 150 million annually, without introducing new taxes.
3. Establish transparent reinvestment systems, including Conservation Trust Funds and performance-
based disbursements to districts and communities demonstrating conservation results.
4. Enable tourism businesses to prepare for AFCON 2027 through facilitative fiscal, marketing, and
compliance measures, not by imposing new taxes or transactional barriers.
Failure to act risks not only ecosystem degradation and lost economic opportunity but also reputational harm to Tanzania’s standing as a premier nature and cultural destination.
Our Continued Commitment
TCT reaffirms its commitment to constructive engagement with the Government and development partners. We remain ready to collaborate on:
• Innovative financing mechanisms such as Public-Private Partnerships and Eco-Investment Funds;
• A national tourism revenue reinvestment plan focused on conservation and community well-being.
• Governance frameworks that ensure every tourist dollar contributes to protecting nature and
supporting local livelihoods.
By investing in conservation and tourism today, Tanzania secures its tourism leadership tomorrow.
Tourism Confederation of Tanzania (TCT)
Email: info@tct.co.tz
Tel: +255 686 968 978
The Tourism Confederation of Tanzania (TCT) is a national umbrella organization for the private sector involved in the tourism industry. Formed, by the directive of the Government of Tanzania, with the vision to support and lead the private sector’s contribution to Tanzania’s tourism industry, TCT represents a wide array of associations within the sector, including aviation operators, travel agents, accommodations providers, tour guides, tour operators, hunting operators, cultural tourism operators, and service providers.
TCT’s mission is to advocate for policies and initiatives that enhance Tanzania’s tourism industry, ensuring sustainable growth and increased contributions to the national economy. They aim to strengthen public-private partnerships, influence regulatory reforms, and drive innovation and infrastructure development across all tourism circuits.
