Tanzania: Study Proposes Tax Relief for Tourism Industry

A NEW study has suggested measures that could cushion the tourism sector from post Covid-19 impacts. Done jointly by local and foreign researchers, the study recommends tax relief and VAT rate reduction as key to stimulate the sector which was badly hit by the pandemic.

The study report is entitled: 'Post Covid-19 Recovery Framework for Tourism Sector in Tanzania.' During a dissemination workshop yesterday in Dar es Salaam, the researchers further proposed in the report that the government could consider reducing landing fees and entry charges paid by the foreigner tourists at local destinations.

The study was conducted between July 2020 and mid this year. Head of Department of Tourism and Hospitality at OUT, Dr Halima Kilungu said the study was conducted jointly by researchers from the Open University of Tanzania (OUT) and two researchers from Hull University and UK.

Led by Principal Researcher for Tanzania Team, Deus Ngaruko, others were Dr Antonio Fierro and Dr Moses Onyoin from University of Hull, UK and Dr Mato Magobe and Dr Kilungu all from OUT.

"During the pandemic, there was a revenue slump as financial institutions' trust on lenders reduced. Therefore, the only fastest way is for the government to reduce tax to cushion the effect caused by the pandemic," she recommended.

The don said the country and tourism sector must start rethinking their market orientation and promotional strategy including diversification of service offerings and focus on non- traditional, domestic and regional markets.

She also recommended that business leaders along the value chain across the country should consider operating through collaborative business models.

OUT Vice Chancellor Prof Elifas Bisanda said the research on the post Covid-19 recovery framework was conducted for the first time in the country, adding that no one has come up with such recommendations.

"Our target as varsity is to come up with recommendations on how to improve the sector. We can work together to mitigate the impact," he said.

In his opening remarks, the Minister for Natural Resources and Tourism Dr Damas Ndumbaro hailed the researchers for the useful document for the ministry and government.

The minister said globally, over 100 million jobs were lost and Tanzania was also affected.

"The government is ready to work with all tourism stakeholders to ensure the sector is vibrant and becomes productive hence contributing more to the government coffers," he said.

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