The government has said it is willing to meet tourism industry players over the contentious value added tax (VAT) imposed on tourism services to find out why they are against it.
The Minister for Natural Resources and Tourism, Prof Jumanne Maghembe, said on Wednesday that concerns voiced by tour operators can be discussed.
The tax which came into effect on July 1 sparked debates and numerous complains from different players in the industry. A similar policy passed in Kenya caused a nosedive in revenue derived from the industry, resulting in the government revision of the same. It has taken a lot of time, effort and resources for the tourism sector to restore it’s former glory. Which is one of the reasons the Tanzanian counterparts were strongly opposed to the move – to avoid a manifestation of the same in their soil.
With tourism being the country’s leading foreign exchange earner, tour operators are of the view that the tax would not only have a devastating effect on the sector but would also result in decreased revenue forthe government.
Prof Maghembe has however allayed fears that the tax would cause a decline in tourist arrivals, at least in the short term, saying the number of visitors was still good.
“Go and see for yourself the long lines of vehicles bringing tourists into Ngorongoro and Serengeti. It does not in any way point to a decline,” he said.
The minister added that the VAT at the centre of the row between the government and tour operators was discussed by Parliament’s committee responsible for the sector last year, but no complaints were raised then.
The minister may however be misreading and misinterpreting the long queues to mean all is well. A number of European tourists have cancelled their trips to the country citing the increased charges while other groups have moved their conferences to hotels in other countries such as Rwanda.
The discussion comes at a time when the rest of East Africa is offering much friendlier rates, thus giving tourists various options to choose from.