Tour operators and suppliers have had to rethink their pricing following the announcement of 18% VAT on tourism services in Tanzania effective from July 1.
Wilbard Chambulo, Managing Director of Kibo Guides and Tanganyika Wilderness Camps, says they will comply and implement the 18% VAT by increasing pricing. He said they had alerted the agencies that they dealt with concerning the additional cost. “The guests will cover the additional 18% VAT, not us, because we don’t have the money.”
Another tour operator, who asked not to be named, said they had not yet thought about how to deal with the VAT requirement and would have to sit down and discuss it. Dr Philip Mpango, Minister of Finance, proposed an 18% VAT charge on tourist services in his budget speech delivered on June 8.
The short notice in which to implement the VAT has been lamented by suppliers. In a notification to the trade, Lemala Authentic Camps and Lodges referred to the new charges as “very last minute”. Lemala is opting to honour existing and provisional bookings where deposits have been paid at the current rates, but will increase prices to accommodate for the VAT going forward.
Bookings for the remainder of 2016 and 2017 for which no deposit has been paid, will be subjected to an additional 5% charge to cover the VAT element that is now applicable on game drives for the game package and on camping/concession fees for the full board and game package, the Lemala statement adds.
Chambulo said they had received a lot of cancellations as a result of the additional charge.
He said they were also expecting some confusion in terms of the bookings for July and August that had already been paid for but they would have to comply with the government changes. “We are not going to charge people for cancelling trips to Tanzania,” said Akko.
Sirili Akko, Executive Secretary of the Tanzania Association of Tour Operators (TATO), met with Regional Commissioner Daudi Felix Ntibenda on Wednesday (June 29), to raise concerns about the implementation of the tourism VAT. “He’s taking it to the relevant authorities and will revert back to us,” said Akko.
