GOVERNMENT YIELDS ON DISPUTED LICENCE FEE FOR TOUR FIRMS

The Minister of Natural Resources and Tourism, Prof Jumanne Maghembe, held a stormy meeting with tour operators on Saturday.

There was no shortage of drama as either side accused the other of undermining the multi-billion dollar tourism industry.

Prof Maghembe and tour operators were engaged in a heated exchange on the validity of a litany of taxes during the meeting, which also saw the government cave in to pressure and temporarily lift its ban on vehicles entering national parks without the licence issued by the Tourist Agency Licensing Authority (Tala).

The minister was forced to lift the ban after tour operators complained bitterly about the $2,000 (Sh4.2 million) licence fee levied on tour firms irrespective of the size of their businesses, claiming that it was too high for some companies and should be reduced.

On November 1, the government banned vehicles from entering national parks and the Ngorongoro Conservation Area without the Tala licence, a decision that has mostly affected small tour firms operating a few vehicles.

The tour operators, under their powerful lobby body based in Arusha, the Tanzania Association of Tour Operators (Tato), said the move was counter-productive and had impacted on small firms run by indigenous Tanzanians.

Tala issues its licence to various players in the tourism industry, including hotels, tour operators, lodges and air charter firms.

However, there have of late been complaints that smaller tour firms are being victimised because they have to pay the $2,000 flat rate even if they have one or two vehicles.

They have asked the government to review the fee and allow tour operators to pay according to the number of vehicles they operate.

Neighbouring Kenya, which Tanzania competes with for foreign tourists in this part of Africa, charges tour operators according to the number of vehicles they have.

Prof Maghembe told the meeting that the government would consider tour operators’ request on the licence fee.

He said the ban would be lifted for a few weeks to pave the way for discussions between tour operators and the government on the way forward.

“Regarding your request to have the Tala licence reviewed, the government will suspend the ban while discussions are going on...I expect a decision will be reached next month.”

The minister added, however, that the Tala licence was mandatory for all those involved in the tourism industry irrespective of the size of businesses.

There have been calls by tour operators and other stakeholders in the tourism sector for different categories of Tala licence holders that would take into consideration business volumes and number of vehicles.

During Saturday’s meeting, representatives of small tour firms asked the government to cut the fee to $200, adding that only big firms with big fleets should be required to pay $2,000.

The small tour operators got an unlikely supporter in Arusha Regional Commissioner Mrisho Gambo, who said the firms were finding it difficult to raise $2,000 for the Tala licence every year and at the same time meet other operational costs.

He concurred with the operators that the fee paid should depend on the number of vehicles owned, adding that companies operating less than 30 vehicles should be exempt.

Prof Maghembe said the fee was not aimed at blocking small operators from taking tourists to national parks.

The intention was to collect the government’s fair share of revenue from the sector, the minister said, adding that 1,230 tour firms paid Sh4.4 billion for the Tala licence during the 2015/16 financial year.

He also came to the defence of value added tax imposed on tourism services earlier this year.

Prof Maghembe defended the government against accusations it was not doing enough to promote tourism, the country’s leading foreign exchange earner and which also accounts for 17 per cent of GDP.

“The government usually considers all factors before passing a decision. We also involve stakeholders...you may recall that this is my fourth meeting with you.”

Tato chairperson Wilbard Chamburo said many local tour firms were operating in an “extremely tough” environment, adding that very few were making enough money to buy new vehicles.

“A new Toyota Land-Cruiser customised to carry tourists costs $90,000 (Sh180 million), which is a lot of money for small tour operators,” he said.

Mr Chamburo added that the government should register all unregistered tour operators to expand the tax base.