When inaugurating the new board of directors of the Tanzania Tourist Board earlier this week, the country’s Minister for Natural Resources and Tourism, Prof. Jumanne Maghembe, once again stepped into the proverbial when he issued a directive to the new board to produce 3 million tourists by the year 2018.
Private sector stakeholders, needless to say on condition of strict anonymity, suggested the minister take a reality check first before demanding the impossible and address the damage done by heaping an 18 percent value added tax on all tourism services in the country.
‘The Minister and the government have our information how the VAT affects booking trends for Tanzania. They rather stick the head in the sand however and hope for the best, which as we all know, did not work out in Kenya. Our neighbours tried and failed and have reversed the tax measure to stimulate tourism growth. How these fellows on the board can produce 3 million tourists no one of us knows to be honest. Right now we are struggling to match the 2015 figures because bookings are suffering. The cost of safaris and all have gone up by some 20 percent and no market can sustain such price rises. If the government wants 3 million tourists they better listen to us first and revise their tax policy or they will never get there. But then, the president made it clear that he rather has only half a million tourists who pay tax and maybe the minister did not read from the same hymn sheet?’ wrote a regular tourism source from Arusha in response to a question asked.
In particular the Tanzania Association of Tour Operators, in short TATO, but also HAT, the Hotel Association of Tanzania, have voiced grave concern over the tax measures and several leading stakeholders have accused Prof. Maghembe to have abandoned the sector’s key players by failing to stand up in cabinet for them and oppose the tax increase. Relations as a result are far from friendly at present and the Minister has a Herculean task ahead of him to repair the private / public sector relations in coming months.