East Africa

18% VAT slap throws safari operators into panic


Tanzania’s safari industry has been thrown into “absolute pandemonium in every conceivable way”, after the African country’s government introduced an 18 per cent VAT tax on tourist services with just a week’s notice.

The unexpected levy means the cost of numerous elements of a holiday – from national park entry to accommodation – have increased by as much as hundreds of pounds. Many facets of the tourism industry were previously exempt from VAT, but the country is now attempting to raise more revenue from tourists.

Safaribookings.com, a website for African safaris, said it had been “bombarded by emails from concerned clients that have received requests from their tour operators to pay an additional amount”.

Marc Harris, director of Tanzania Odyssey, said the new tax was a “complete and unmitigated disaster”.

“The Tanzanians can obviously do what they want to do as far as VAT goes, that’s absolutely fine,” he said. “It’s the notice period that’s the problem. They alerted us on June 23, like a week before the taxes were coming in. There have been all sorts of implications.

“No one has any idea what is going on. The lodgings we use don’t know whether to take on the tax or pass it on to us.”

Mr Harris said it was not clear whether the taxes would apply retrospectively to bookings, which would affect far more people. He said Tanzania Odyssey had already been forced to contact some of its clients “depending on where they are in the booking process” to ask for more money, due to the hike.

The Ngorongoro National Park, popular for spotting the Big Five, has increased its fees by 18 per cent, but Mr Harris said the national parks are not even VAT registered “so are taking this additional money, but have no idea what do with it”.

“It’s a mess. There are queues at the parks and it’s a bit ungainly,” he added.

But he says the main concern is around accommodation, which could see a seven per cent rise in prices.

“On the whole, many of the increases will not amount to too much, but it is the lodgings that will go up the most, adding a couple of hundred pounds onto the cost of a holiday,” he said. “It also means travellers might switch countries, to say, Kenya.”

Tanzania Odyssey is not a member of ABTA, the travel association, so would not have needed their permission to apply a surcharge, as mentioned in its terms and conditions, but a spokesperson for ABTA said the tax hike was most likely to affect purchases in Tanzania.

He added that, should any operators approach ABTA for permission to apply a surcharge, they would be within their rights so long as they followed legal protocol.

Wouter Vergeer from SafariBookings.com said: “The short notice has shocked hundreds of tour operators, thousands of clients have been hit with unexpected charges, and park authorities haven’t had enough time to implement these changes and provide proper VAT receipts.”

Tanzania receives about 1.1million tourists a year, of which about 75,000 are British.


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