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Tanzanian tour operators have expressed disappointment over their government’s failure to initiate a promised amendment to the fifth schedule of the East African Community Customs Management Act 2004, which would provide import duty exemption on various types of motor vehicles for the transportation of tourists.
The amendment was announced by Parliament in the 2018/19 budget session, with the aim of boosting the local tourism industry. July 1 was set as the activation date, yet six months later no solid steps have been taken to bring the amendment into effect.
The Tanzania Association of Tour Operators (TATO) has reached out to government to seek clarification on the way forward, as many of its 300 members had discarded a number of their old vehicles with the expectation of importing new ones duty free in preparation for the festive season tourism increase. Some operators had also complained that their vehicles were stuck at ports over the controversial import duty.
TATO Chairman, Wilbard Chambulo, said: “Most of us are stranded as the government is silent on the import duty exemption. We just want a word from the government whether the commitment was either false or real.”
Available records indicate that Tanzanian tour operators are subjected to 37 different taxes, including business registration, entry fees, regulatory license fees, income taxes, and annual duties for each tourist vehicle. A study on the tourism sector indicated that the administrative burdens of completing license taxes and levy paperwork are a heavy cost in terms of time and money for local businesses. “Tour operators need streamlined taxes to ease compliance, because the cost of compliance is so high and as such it inhibits voluntary compliance,” explained Chambulo.
The Minister of Finance and Economic Affairs, Philip Mpango, did however promised in the budget speech that government planned to introduce a single payment system to streamline the process, that would enable businesses to pay all taxes under one roof in a bid to offer them a hassle-free tax compliance.
TATO Chief Executive Officer, Sirili Akko, recently wrote a letter to the Minister of Finance to seek clarification on the status of exemptions, and the way forward.
Source: tourismupdate.co.za
