On July 1, the Tanzanian government began charging an 18% valued added tax (VAT) on many previously exempt tourist services, including ground transportation, park fees, water safaris, guiding fees, camping fees and wildlife-viewing packages.
According to SafariBookings.com, an online marketplace for African safari tours that includes over 1,750 operators, the new tax has “caused chaos in the safari industry, forcing tour operators to charge clients up to 18% extra for safaris that had already been paid.”
At issue is the short notice given by the Tanzanian government, which introduced the change as part of the 2016 finance bill on June 3, passed it on June 23 and implemented it July 1.
“As most safaris are paid for months in advance, this short notice didn’t give tour operators the opportunity to add VAT on top of their usual rates,” said SafariBookings.com in a statement.
As a VAT had previously been charged for accommodations, tours that use accommodations are seeing a 5-10% price increase, while camping and Kilimanjaro tours are now 18% more expensive.
Some operators are not even VAT-registered, because they had previously been exempt from the tax.
SafariBookings.com says that it has been “bombarded” by emails from clients who’ve been informed that their safaris are now hundreds to thousands of dollars more expensive.
While tourism in Tanzania has been rising steadily, according to the World Bank — growing from 566,000 international arrivals in 2004 to more than 1.1 million in 2014 — SafariBookings.com’s Wouter Vergeer worries that the new VAT charges could negatively impact the industry.