Abstract:
This paper intends to serve as an early wake-up call for the need of reviewing and harmonizing
taxes and levies imposed on the Tourism Industry in Tanzania. The research adopted
qualitative method, involving 154 respondents who were drawn conveniently from over 1550
tourism stakeholders in the subsectors of accommodation, tour operations, tourism investors,
travel operators, event organizers; tour guiding, arts and crafts, among others. Data were
collected through focus group discussions (FGDs), Key Informant Interviews (KIIs) and field
observations. The data gathered were processed and analysed qualitatively; the researcher
first translated and categorized them into various themes and sub-themes basing on the
research objectives and research questions in both FGDs and in-depth interviews
guides. Data from the in-depth interviews were transcribed and analysed using thematic data
analysis. Verbatim quotes were used to illustrate points of views during preparing this
report. This study reveals that high tax rates coupled with multiplicity of these taxes within the
government institutions hinder the development of sustainable conservation and tourism
initiatives at the local and national level in Tanzania. Also, incoherent, lack of harmonisation
of the taxes and multiplicity of taxes make Tanzania destination relatively expensive compared
to other peer destinations in East and Southern Africa region. Over half of the tourism
stakeholders, just pay taxes, levies and other charges ignorantly without awareness on the
policies and laws associated to them. The tourism industry possesses stakeholders who largely
not aware of the policy and legal aspects governing taxation. The lack of taxes compliance and
tax avoidance in the tourism sector are attributed by multiple factors, which need to be
mitigated. It was further observed that, despite the role played by various tourism associations
and confederation in reforming the tourism business environment, a lot still needs to be done
especially on the types of taxes and levies imposed on tourism industry in the country. This
calls for a need of reviewing and harmonizing of all the taxes and levies imposed on the tourism
services in the country for ensuring that Tanzania destination maintains its competitiveness.
