President John Magufuli has confirmed that the government would not review its decision to impose Value Added Tax on the tourism sector adding that they would not bow to pressure from tour operators or their foreign agents.
The move by the government has been strongly opposed by a number of industry players, who have been campaigning hard to have it scrapped.
Local tour operators and agents in Europe wrote to the government recently, asking that the tax be suspended for a year. The President however said those who were required to pay the tax had no choice but to comply.
In response to the concern that the country risked pricing itself out of the regional tourism market, President Magufuli said it was better to have 500,000 tourists who paid taxes than a million who did not.
“The country’s development depends on the revenue we collect. This is the money that is used to implement various development projects, so there is no way we can remove VAT for the sake of maintaining a high number of tourists,” he said.
“Some people are claiming that there are no guests in hotels, but this will not change our ambition. We are moving forward,” he said in response to reports that hotels were closing down in various parts of the country as a result of the government’s cost-cutting measures.
“It doesn’t make sense for the country to attract a big number of tourists, but fail to benefit from them.”
He also mentioned that VAT being charged at Dar es Salaam port would not be scrapped despite reports of a sharp fall in the amount of cargo passing through the port.
“It’s clear that whoever uses our port must pay the requisite charges. We have no time for people who are reluctant to accept our terms. We would rather have fewer ships docking at the port.”
The President stated there would be no “free money” during his time at State House, adding that everything would be done systematically according to rules and regulations.