Zanzibar allays work permit fears

Dar es Salaam. The Zanzibar government has moved to allay fears among investors that plans were afoot to raise the work permit fees from $150 (Sh240,000) to $2,000 (Sh3.2 million).

The Zanzibar minister for Labour and Cooperatives, Mr Harun Ali Suleiman, said yesterday that there were no immediate plans for a massive rise in work permit fees, contrary to the growing concern, especially among tourism investors in the Isles, over the implications of such a move on the economy.

Reports emerged from within business circles in Zanzibar last week pointing to a reported plan by the ministry to push up work permit charges in next financial year’s Budget. The minister is scheduled to table his financial statement for fiscal year 203/14 on Friday. 

However, in a telephone interview with The Citizen yesterday, Mr Suleiman said the government had only made a proposal to review the $150 transaction fee per application currently levied by the ministry.

“This is just work in progress and no concrete decision has been arrived at yet. A tripartite committee comprising all stakeholders is still working on our proposal,” said Mr Suleiman. The minister said investors have no cause to worry as such a sensitive decision wouldn’t be approved without proper consultations as required by the law.

“We are looking around how to raise our operational revenue and this $150 transaction fees is one of the many areas under consideration. Whether it would be enough or need to be reviewed is a matter to be decided by the stakeholders,” the minister explained. Investors had raised an alarm that the new proposal would make it too expensive for foreign professionals to work in Zanzibar, hence affecting the tourism sector, the economic mainstay of the clove islands.

Currently, most foreigners pay $2050 (Sh3.28 million) for a two- year residence permit that allows them to be employed. The money is payable to the Immigration authorities which fall under the Union government.

There are fears that if Zanzibar authorities raise the additional fees under the ministry of Labour, and for the speculated margins, the cost for a foreigner working in Zanzibar would be a whopping $4,000, which will be far beyond the reach of most investors and the most expensive EAC and SADC regions.

Yesterday, however, Mr Suleiman said it was premature to come to conclusions and reassured investors that their worries would be addressed through their respective associations.  “My budget will not certainly include the new fees.”

The Citizen gathered that the minister had met a section of the investor community to allay the fears and gave them 30 days within which to forward their proposals.

At the same time, the chairman of the Zanzibar Association of Tourism Investors, Mr Abdulsamad Said, told The Citizen the association was pleased with the reassurance from the government over the matter.

“We welcome the reassurance and appreciate that the government is ready to listen to the business community. We as Zati are looking forward to a fruitful engagement,” Mr Said said.  He confirmed that there would talks involving the commissioner for labour, Mr Simba Kubingwa, on the way forward as suggested by the minister.   Tanzania last year imposed a 33 per cent increase in work permit fees, raising the fees for residence permits to $2000 per employee from $1,500.