By Henry Lyimo
THE tourism industry has a
great potential for more growth and increase of foreign exchange
earnings to 16 billion US dollars annually by 2025 from the current 1.5
billion US dollars if it is adequately managed, the World Bank (WB) has
said.
WB Lead Economist Jacques Morisset said in Dar es Salaam that
Tanzania would get optimal benefit from its tourism industry if it
simplified its tax system and fees and made its revenue allocations more
transparent.
"Tanzania has so many assets. It is a blessed country... I am coming
from Switzerland where we have nothing. You have everything. You must
take comparative advantage," he said in his presentation at the special
meeting to deliberate on the sixth Tanzania's economic update published
recently by the bank.
Mr Morisset pointed out that the government has failed to capture all
returns from the tourism sector due to an inefficient tax system and
non-transparent redistribution mechanism and weaker linkages with the
local communities and businesses.
He said tourism operators were subject to more than 20 taxes and
fees, including Value Added Tax, income tax, municipal service levies,
employers' contribution and safety inspection fees.
"The complexity of the system translates into numerous inspections
and visits by tax inspectors and collectors which are time consuming and
provide opportunities for corruption and underreporting of collected
revenue," he observed.
He said the government needed to also diversify tourism activities in
multiple dimensions instead of focusing on the northern circuit only
which takes about 90 per cent of all tourists coming to the country.
According to him, the government needed also to focus on further
integration of the local communities and businesses in the sector to
create more businesses and high-paying job opportunities to Tanzanians.
He mentioned other reasons that make Tanzania fail to get optimal
benefits from the sector as the fact that many tourists, up to 60 per
cent of total arrivals, are pre-booked abroad. Retired president
Benjamin Mkapa, who was the chief guest, commended the government for
continuing with consultations with the private sector on issues that
affect their operations.
He noted that it was important for the private sector to grab the
opportunities for discussions with the government and chart out
strategies for progress instead of lamenting.
Mr Mkapa said discussions on the strategies to boost growth of
tourism industry should also focus on the participation of the private
sector in the airline industry.
He said it was vital that the stakeholders discussed how the private
sector could contribute in developing a more vibrant airline industry
that is vital in boosting the growth of the tourism sector. "We have
discussed a lot about reviving the national airline but this has cost
implications.
Where will the money come from?" he queried. "Why don't we discuss
how the private sector can participate and contribute to creation of a
more vibrant airline industry?" he asked.
Mr Mkapa said it was important that the government focused on
strengthening linkages between the tourism industry and the local
government to ensure local communities benefited from natural and
wildlife tourism.
The Minister for Natural Resources and Tourism, Mr Lazaro Nyalandu,
said the government would work on recommendations to simplify system for
tax and fees to create a more conducive environment for tourism
operators.
"Some of this craziness indicates lack of coordination on our part...
a situation where the left hand does not know what the right hand had,"
he lamented.
The minister reported that the government would sit together with the
private sector to find the best modality of how concession fees would
be paid.
"We will sit together to see how this is amicably resolved," he said.
Mr Nyalandu further reported that the government would sensitise the
private sector to make sure they come up with policies for taxation that
will not stifle the sector.
"Our focus is to come up with policies that would ensure that the
government gets what is due to it but that should be predictable," he
said.
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