TANZANIA: Tourism 'To Lose Sh2 Trillion' As Value-Added Tax Hurts Tourism

Tanzania's new value-added tax (VAT) on tourism services could reduce the number of visitors from the European Union by half, a group has warned.

ECTAA, s a group of national travel agents' and tour operators' associations within the bloc, says member countries account for 50 per cent of all tourists who arrive in Tanzania and whose planned trips could now be cancelled over the additional cost.

The loss of 50 per cent of tourists would mean the country losing an estimated Sh2 trillion if data from the previous year's trading is anything to go by.

On July 1, Tanzania imposed VAT on tourism services despite outcry that it would make the country a more expensive destination.

So far about 8,000 tourists have cancelled their vacations to Tanzania, denying the country $660,000, The Tanzania Association of Tour Operators (Tato) says.

ECTAA has called on the Tanzanian government to either scrap the VAT or else they will rebook their customers to other African destinations.

ECTAA represents the national associations of travel agents and tour operators of 27 EU member states, of two EU accession countries as well Switzerland and Norway, and three international members.

It represents some 70,000 enterprises in Europe.

The permanent secretary in the Ministry of Natural Resources and Tourism, Maj Gen (rtd) Gaudence Milanzi has said the ministry would soon have a dialogue with Tato to see to mitigate the government decision on VAT on tourism services.