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Not Again....TZ govt plannig to raises VAT and other taxes??

San Francisco...
posts: 214
reviews: 9
Not Again....TZ govt plannig to raises VAT and other taxes??

Edit: Sorry for the typos in the title.

Last time I as planning a trip to TZ in 2011, there was some TANAPA mandate for raising prices.

Deja Vu ! My tour operator sent me this : eturbonews.com/35761/unfriendly-tourism-budg…

I have been informed that if the govt approves this, my safari prices for 2014(and yours too) could go up.

1. VAT increase on Transport and park fees

2. Bed nite levy 2% on accommodation costs

Any thoughts from the experts about what's going on ?

Edited: 12:02 am, June 28, 2013
melbourne
Destination Expert
for Tanzania
posts: 5,069
1. Re: Not Again....TZ govt plannig to raises VAT and other taxes??

If you are booking and paying for your 2014 safari now and paying a deposit I would expect the TO to sell your trip to you at an agreed fixed price. It is not retrospective.

melbourne
Destination Expert
for Tanzania
posts: 5,069
2. Re: Not Again....TZ govt plannig to raises VAT and other taxes??

Now my thoughts:

What's going on...

They are trying to raise more revenue like most councils and governments all over the world.

The bed night levy 2% what does your TO say about that... who is it for and who is charging it Tanapa.The article is not clear on that one just a discussion on VAT and its increases.

I would lock your 2014 safari into an agreed upon price if your TO doesn't want to do it then look for one who will.

The increases in VAT will increase the charges for a safari eventually and Tz will be even more expensive than Kenya and other destinations.

I have talked to many people in government over many years and they have the same train of thought ..what we have is the best in the world why shouldn't people pay for it.

I think they are aware of the Goose as well. Lets see how it all pans out. I wouldn't panic yet nor cxd my trip.

Edited: 2:48 am, June 28, 2013
Sydney
posts: 194
reviews: 6
3. Re: Not Again....TZ govt plannig to raises VAT and other taxes??

The TATO annual meeting yesterday discussed this issue. The VAT is a surprise to all concerned and was sprung upon those at the meeting. TO's had not been informed of the proposed introduction of the VAT on all services provided by TO's. Its proposed introduction was 1 July.

There has been no indication of how it will be charged or any relevant information which is usual for the Govt of Tanzania. Its been mooted as a new revenue raising exercise however just who is will benefit I will leave to the thoughts of astute followers of Tanzanian politics.

Isle of Man, United...
posts: 31,261
reviews: 188
4. Re: Not Again....TZ govt plannig to raises VAT and other taxes??

Value added Tax is current throughout the developed world and we live with it. So never be surprised when the 'disease' spreads elsewhere. It's a Tax on spending, just likes Sales tax in USA. It is thus fairer in that if you don't spend, you don't pay it. It's Optional. It will simply make high end Safaris even more high end. Live with it. Sleep under a Bush. Tell them you are not bird watching but visiting relatives. Drive yourself.

< It is not retrospective.> Wanna bet? VAT is levied at Time of Payment not time of booking. You will have to pay up front to avoid it if it comes.

Edited: 4:53 am, June 28, 2013
Arusha, Tanzania
posts: 186
reviews: 2
5. Re: Not Again....TZ govt plannig to raises VAT and other taxes??

READ THIS: (1)

-----------------

The Government has agreed to withdraw its proposal in 2013/4 Finance Bill of levying VAT on Tourism Services. The services which were listed are:-

1. TOURIST GUIDING; GAME DRIVE; WATER SAFARIS; ANIMAL OR BIRD WATCHING;

PARK ENTRY FEES; TOURIST CHARTER SERVICES & GROUND TRANSPORT

Other Changes in the Finance Bill are:-

2. Excise duty on Aircraft and helicopters has been removed for those that

carry passengers and commercial services.

3. Withholding tax will apply on payments in respect of Aircraft Lease Rental.

The decision on the following item will be sent when obtained

1. Import Duty exemption on Deemed Capital Goods relevant to Tourism Sector

We would like to recognize and thank all those who participated in one way

or another in achieving the cherished goal within the sector, in the

Government and outside including the Tourism source market. Nobody should claim credit.

2. PROPOSED CHANGE ON MT. KILIMANJARO CREW FEES AS AT 1st, JULY 2013

Please be informed that the proposed new mountain fees for crews which was

to be effected from 1st, July 2013 has been

deferred to 1st, July 2014.

Isle of Man, United...
posts: 31,261
reviews: 188
6. Re: Not Again....TZ govt plannig to raises VAT and other taxes??

Good news indeed. Thanks for the update.

Old Moshi...
posts: 85
7. Re: Not Again....TZ govt plannig to raises VAT and other taxes??

Unfortunately I still haven't heard a clear answer about the 2% tourism development levy, which will possibly come into effect on July 5th (?). It is the Tanzania Revenue Authority who would be in charge of it, not TANAPA, and unfortunately the TRA may not have the insight into the industry to introduce it slowly and fairly, i.e. people who have already booked with their TO and even paid a deposit, the TRA may bill the TO who may bill the TA who may bill the client! Lets hope this one gets deferred too.

Findlay, Ohio
Destination Expert
for Tanzania, Ngorongoro Conservation Area
posts: 11,762
reviews: 6
8. Re: Not Again....TZ govt plannig to raises VAT and other taxes??

Tanzania has had the VAT for at least 10 years now, probably 15. It is not enacted on everything and there are exemptions (such as computers, agriculture equipment, etc.). Of course, as it is with most all governments, what they get is not ever enough. So they are looking at every budget bill which gets introduced into the Bunge for an expansion of the levies. This year it was the tourist industry's turn at bat. I did see where they are backing off this; but don't know if it a complete back off or not.

Wait until the dust settles on this before you react to it. There is always a lot of horse trading going on with these kinds of things. I would imagine that most of it will be eliminated for this year, but once introduced Katy bar the door, it will raise it's ugly head again in another budget bill in later years.

nyc
posts: 13,050
9. Re: Not Again....TZ govt plannig to raises VAT and other taxes??

For now, seems but for the 2% on accommodations has been postponed... till when? who knows? This percentage will impact all lodges/camps and payable by the cliient even if full payment has been made. And as all outfitters seem to get different contract rates, assume increase will be based on the actual 'rack' rates.

Am sure all of the outfitters are reviewing their upcoming client files to determine what this will amount to, but doubt they'll be able to absorb this. Just too much money, on the already small profit most work on. This staturory increase will not be like previous small surcharges for flight fuel (many clients have no flights), or even for vehicles... this will be a serious number.

There are lots of unhappy/frustrated outfitters now in Arusha and elsewhere in Tanzania, and no doubt soon, so too clients.

Edited: 11:41 am, June 28, 2013
Isle of Man, United...
posts: 31,261
reviews: 188
10. Re: Not Again....TZ govt plannig to raises VAT and other taxes??

I don't figure this at all. Surely the 2% will be charged on the Invoice level? So a $1000 on payment becomes $1020. That is no big deal. Most folks don't know if what they are paying is Rack rate or Concession and give or take 2% won't really notice or care.

Your previous $10,000 Safari now costs up to $200 more. Hardly off putting! As we have seen quotes from two operators can vary by more than that.