Taxation

ZATI understands that fees, taxes and levies are a necessary, and important part of building a healthy economy and are happy to comply with charges that are reasonable and introduced with ample time to implement. However, currently this is not the case and Zanzibar needs to be careful as to not increase the widening the gap between itself and the rest of Africa – and invite an economic downturn as investors migrate away of Zanzibar taking with them their potential for investment, transferable skills and potential for creating employment.

ZATI believes the continual additional excessive fees/taxes/levies being applied to the tourism industry will harm Zanzibar’s economy – and that there are better alternatives to increase revenue for the Ministry in order for it to be able to deliver its mandate.

A costly, and complex environment for tourism represents a major barrier for Zanzibar to fully tap into its tourism potential. The ‘Doing business in 2010’ World Bank and International Finance Corporation report positioned Zanzibar at 155 out of 183 in term of of world ranking. Tanzania mainland was ranked 131. There are many other countries that make it easy for doing business but unfortunately Zanzibar is not classed as one of them. Complex fee structures and excessive fee increases are a key reason that deters investors.

Tourism is a significant source of income for Zanzibar and currently generates 15,000 direct jobs and 50,000 indirect jobs. It can easily create thousands of jobs at the lower end of the skills-set within the direct tourist sector, and indirectly through other segments including agriculture, agro-processing, infrastructure and aviation. The value of tourism and its potential to grow the economy needs to be fully realised.

VAT Amendment – position paper Min of Fin 200514

Position paper for Minister of Labour – PM OS 020813

ZATI Policy Brief For Submission