Wednesday, July 13, 2016

Tanzania VAT Update


We know that you have been bombarded by a multitude of emails regarding the VAT situation in Tanzania. Albatros Travel has tried wherever possible to keep the impact of the VAT implementation to a minimum on all safaris that have been confirmed and has provided us with a helpful breakdown on what this change means for various components of a safari. What is still undetermined is what various properties will do with their game package rates on confirmed bookings. Stay tuned for more news on that front.

The impact of VAT on any new safari to Tanzania is as follows:

1. Vehicle Hire

From our calculations we believe that the impact VAT will have on the vehicle cost will be a 10% increase.

2. Park Fees

This is the area most hit as the park fees will increase by 18% to clients.

3. Ngorongoro Conservation Area

The Ngorongoro Conservation Area (NCA) has decided to increase the park fees by USD10 per person and the Crater Fee by USD50 per vehicle. These new rates are also subject to VAT, making the increase very significant. There are also increases to Olduvai Gorge and other excursions within the NCA.

4. Accommodation on Full Board Basis

As VAT was already included on accommodation there should be a minimal impact on accommodation on a full board basis. However, some properties had service charges that were removed from the net VATable amount. Therefore expect some full board rates to increase by about 4%.

5. Accommodation on Game Package Basis

We are reliant on these properties to work out the impact of VAT as there are implications on their vehicle, camping fees, concession fees and park fees. Assume an increase of 5% to 7%.

6. Flights

There is no VAT on flights, so there will be no increases.

7. Excursions

Trips to a village or a school will now all be subject to VAT making these excursions increase by 18%

8. Balloon Safari

There will now be VAT on the concession fee – an increase of USD10 per person.

So what is the overall effect of VAT on a client travelling to Tanzania?

From the calculations we have done, we estimate a driving safari to increase by 10% to 12% and a flying safari to increase by about 7%.

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