Tourism share of GDP set to hit 20 percent in 2025

Thursday August 04 2022
Tourism pic
By Zephania Ubwani

Arusha. Tourism share in Tanzania’s gross domestic product (GDP) will reach as high as 19.5 percent in 2025/26.

The fastest growing sector in the economy has been contributing 17.5 percent and 30 percent of forex earnings.

Projections by the industry players show that tourism will register a 6.2 percent growth between now and 2025.

“In that case, the tourism share in the GDP will reach as high as 19.5 percent in 2025/26,” said Godwill Wanga, the CEO of Tanzania National Business Council (TNBC).

He revealed this in Arusha during a recent public- private sector dialogue on policy reforms for the tourism industry. Dr. Wanga said tourism would continue to remain the leading export sector in the economy provided some challenges are addressed.

Matters that should be sorted out include a string of taxes and levies and uncessessary red tape in investment registration.

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He outlined new investment frontiers such as the development of the permanent tented camps (PTC) in the protected areas. This, according to him, is an investment category whereby the tourism concession is given to an investor for PTC.

“Here, all tents for the visitors and staff accommodation, shops and other facilities shall be allowed to be located in this area,” he said.

The area, the TNBC executive director explained, shall not exceed two square kilometres of the approved site plan.

For the Hot Balloon Operation Base Camp, the area shall not exceed 500 kilometre square of the approved design layout.

PCT operators will have to pay $20,000 per annum to the Tanzania National Parks (Tanapa) for those set up in their sites.

Dr Wanga also dwelled on what he described as ‘high end investments’ during a dialogue attended by the Natural Resources and Tourism ministry top brass. “This is an investment category whereby the tourism concession area is given to an investor for the development of a hotel or lodge,” he pointed out.

Here all the permanent buildings for visitors, staff accommodation, shops and other facilities shall be allowed to be located there.

The area shall not exceed three square kilometres of the hotel site plan. Hotels will pay Tanapa $50,000 per year.

He called for streamlining of the taxation within the sector so as to make them more facilitation to the tourism promotion.

The government revenue components include the Tourism Development Levy (TDL) which contribute 62.4 percent and Tanzania Tourism Business License (TTBL) 37.5 percent.

Taxation on the tourism sector also applies to Value Added Tax (VAT) on tourism services,rent, Skills Development Levy (SDL) and service levy, among others.

Speaking during the dialogue, the minister for Natural Resources and Tourism Pindi Chana said the ministry was keen to improve the TDL payment system.

According to her, the streamlining of taxation in the tourism industry will involve the local government authorities.

Despite the recent impact of Covid-19, the government is confident that the country will attract five million visitors come 2025, earning the economy a record $6 billion