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Zanzibar starts classifying hotels to enable implementation of the new changes on infrastructure tax announced in the current fiscal year. This will assign hotels, mainly tourism, according to their stars, to pave the way for the execution of the new changes as per the state minister.
Zanzibar starts classifying hotels to enable implementation of the new changes on infrastructure tax announced in the current fiscal year. This will assign hotels, mainly tourism, according to their stars, to pave the way for the execution of the new changes as per the state minister.
According to changes that follow a review of the Zanzibar Finance Act No 9 of 2015 establishing an infrastructure tax, a flat rate of 5.0 US dollars will be charged for a person who sleeps in a five and four-star hotel. Before the changes, a flat rate of one US dollar was charged per person who sleeps in any hotel. Under the new changes, four US dollars will be charged per person who sleeps in a three and two-star hotel and two US dollars per person who sleeps in a one-star hotel and others including visitors who sleep in rented apartments.
The new rates took effect on July 01 but encountered complaints from hoteliers as most did not know which class or grade star they belong, prompting authorities to classify before applying the new infrastructure tax rate. Most of the 706 hotels in Unguja and Pemba range from one to two-star, while five, four and three-stars are few. ZRA is working with the Tourism Commission and experts to classify and grade hotels and the ranking according to their stars list will be released as soon as possible for all hotels in Zanzibar.
The Chairperson of the Zanzibar National Chamber of Commerce (ZNCC) stated that the issue of infrastructure tax changes is something that needs to be implemented in accordance with the laws. The purpose of increasing the infrastructure tax has great benefits in developing tourism in Zanzibar because when the tax increases, it enables the government to implement its programmes including having better road infrastructures for tourists. The chairperson thanked the government for considering their request not to adopt the new infrastructure tax charges for those tourists who have already booked and paid for this year, before the tax review.
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ZRA advised hotels to use electronic payment and get connected to the authority system, and that integration of the tax system, to include immigration, airports, seaports, and other relevant income sources, is underway aimed at controlling fraud.
