23 July 2018

Tanzania: 'Proxy Tour Firms Steal Billions From the State'

SOME local tour operators are suspected to have dissolved their registered companies, opting to use proxy safari companies in ongoing rackets to avoid paying taxes.

Between the 4th and 20th of July 2018, officers from the Tanzania Revenue Authority (TRA) who pitched camp at the Loduare Gate discovered over 500 freelance operators who conducted business under the cover of the names of legitimate companies.

Loduare Gate is the entrance into both the Ngorongoro Conservation Area and Serengeti National Park. The TRA Internal Revenue Commissioner, Mr Elija Mwandumbya, revealed that, during the two week monitoring mission at the gate, they discovered that most tour vehicles bore the labels of legitimate companies but which were in reality operated by freelancers who frequently changed their identities.

Without disclosing actual amounts, Mr Mwandumbya said through these rackets, the government was losing billions of shillings because the freelancers were not paying taxes, but merely paid gate fees. "Two thousand and two hundred people and firms are engaged in tourism business, including tour companies and hotels; of which 1403 are based in the Northern Zone.

However, 500 operators are not listed anywhere, and yet they earn as much, if not more from the industry without paying taxes," the TRA official explained.

On his part, Mr Jovinus Rugemalira, the TRA Tax Assistant at the Loduare Gate, said many of the freelance driver guides who took visitors into the parks sometimes recorded wrong information regarding the number of visitors in their vehicles or duration of their stay in the said destinations.

"The majority do not have working agreements with the companies they claim to represent; therefore we are out to ensure that the firms provide them with temporary contracts on either daily or weekly basis, so that we can be able to trace our revenues there," he said.

One of the freelance tour guides, Mr Reginald Matemu, remarked: "We are eager to pay government taxes, so long as there is a proper system for enabling us to comply with such demands," he said.

Mr Matemu lauded the TRA officials for conducting the inspection exercise stealthily without alerting the foreign visitors in the vehicles.

Tanzania has more than 250 tour companies that are listed with the Tanzania Association of Tour Operators (TATO) in Arusha.

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