Zanzibar Revenue Authority (ZRAJ) has announced the approval of new infrastructure charging rates for hotels by the House of Representatives of Zanzibar. The rates were approved on June 23rd, 2023, as part of the Government Budget for the financial year 2023/2024. It will come into effect from July 1st, 2023.
Zanzibar was previously charging hotels $1 for every room occupied at night. The fee had been in existence for eight years. It was paid to the government by all hotels in the region.
The parliament debated the proposal for the new infrastructure charging rates before it was adopted into law. This parliamentary discussion provided an opportunity for further deliberation and potential amendments.
According to the amended Finance Act No. 9 of 2015, the new infrastructure charging rates for hotels in Zanzibar are as follows:
- 5 or 4 stars hotels: USD 5 or its equivalent in Tanzanian Shillings per person per day.
- 3 and 2 stars hotels: USD 4 or its equivalent in Tanzanian Shillings per person per day.
- 1-star hotels and others: USD 2 or its equivalent in Tanzanian Shillings per person per day.
The responsibility for collecting this infrastructure tax lies with the hotel management, as outlined in the Tax Administration and Procedure Act, Number 7 of 2009. To facilitate the implementation of the tax and minimize inconvenience to taxpayers, the following guidelines have been provided:
- Instalment Payments: Hotels with justifiable and verified reasons may apply to the Commissioner General, under section 40 of the Tax Administration and Procedure Act, Number 7 of 2009, to pay the required infrastructure tax in instalments. This option is available within three months from July 1st, 2023.
- Payment Extension: Hotels with valid reasons may also request an extension for part of the infrastructure tax payments, provided they apply to the Commissioner General no later than October 2023. You can find this option outlined in section 31(4) of the Tax Administration and Procedure Act, Number 7 of 2009.
Potential Impact On Tourists
The implementation of these new charging rates will have a slight impact on client travels and the cost of accommodation. The increased infrastructure tax will lead to a slight increase in the overall cost of accommodation for clients staying in hotels in Zanzibar. However, note that the fees may be paid by the clients directly at the hotel during their stay sometimes.
The Zanzibar government aims to utilize the revenue generated from this infrastructure tax to invest in the local economy. They also plan to use it to improve the overall infrastructure and services provided to tourists in the region.
These investments will enhance the overall experience for visitors. It will also contribute to the growth and development of the tourism sector in Zanzibar.
