A good number of Tanzanian Members of Parliament on Monday opposed the government’s plan to charge a Value Added Tax (VAT) on tourism services, saying the move was likely to kill the booming industry.
If approved by the National Assembly, the VAT will be charged on supplies of tourist guiding, game driving, water safaris, animal or bird watching, national parks fees and ground transport services.
William Ngeleja, an MP for Sengerema constituency on the ticket of the ruling party Chama Cha Mapinduzi said the move will not only affect the tourism industry but also benefit neighbouring Kenya which also has similar attractions as Tanzania’s but has dropped the VAT after realizing that it had affected their tourism sector negatively last year.
Several MPs opposed the new tax on tourism services saying adopting a measure that has been dropped by a neighbouring country after it had shown to be negatively affecting their economy amounted to “killing the country’s tourism industry”.
The MPs appealed to the government to look for other new sources of revenues instead of coming up with measures that will strangle the growth of the tourism sector.
On Sunday, the 330-member Tanzania Association of Tour Operators said in a statement that the country was considered a more costly destination due to multiple taxes and the proposed VAT would be a suicide for the 2.2 billion-U.S. dollar industry.
Tour operators in Tanzania are already subjected to 32 different taxes, twelve being business registration and regulatory license fees as well as 11 duties for each tourist vehicle per annum and nine others.
Presenting the 2016/2017 budget in the National Assembly last week, the Minister for Finance and Planning, Phillip Mpango, proposed to review the VAT with a view to imposing VAT on tourism services. – Xinhua