VAT Does Not Deter Tourist from Tanzania

September 16, 2016 Taxation in Tanzania

DODOMA – Tanzania is seeing significant growth in the tourism industry, as thousands flock to the country’s national parks, despite the recent implementation of a VAT on tourism services.

A new report released by the Ministry of Natural Resources and Tourism of Tanzania indicated that the country’s recent implementation of Value Added Tax on tourism services has not hurt the industry, as previously expected.

Between July and August this year, the total amount of VAT collected from the tourism industry was TZS 67.87 billion, while over the same period in 2015 the collections reached TZS 57.96 billion.

Similarly, the number of tourist visiting national parks between July and August rose to 348 547, compared to a total of 340 308 in 2015.

Prior to the introduction of the VAT on tourism services it was argued by representatives of the industry and several politicians that the tax would drive tourists away.

However, it was noted in the report that many tourists were not aware that the tax had recently been implemented, while some even believed that there was not tax being charged at all.

Photo by: Kenny Louie