Recap: Tax measures tourism & services sectors in Ethiopia, Uganda & Tanzania

In our discussion on the 13 of August 2020 we had panelists from Ethiopia, Uganda and Tanzania. The aim of the discussion was to consider how the tourism and services sectors in the three countries are coping with the COVID 19 impact. We looked at tax measures on tourism in, Ethiopia, Uganda and Tanzania.

A number of similarities exist in Uganda and Tanzania tourism sectors. In both countries tourism sector contributes significantly to the per capita Gross Domestic product (GDP). This is unlike Ethiopia. That may be quite a surprise noting that Ethiopia has a number of heritage sites. A number of other things have hindered the growth of the Ethiopian tourism sector, top of which is underdeveloped infrastructure.

All the three countries rely significantly on international tourism as compared to the domestic side. Uganda has been working towards promoting domestic toursim through various events like the Nyegenyege festival. The Tanzania tourism board has also been working to promote domestic tourism. Moreover, prior to the COVID 19 the East African Community (‘EAC’) was working to promote tourism within the Community.

On the tax measures, Uganda has a proposed law that will give a number of incentives to the tourism sector. The tax measures include, Value Added Tax (‘VAT’) exemption on materials used to construct hostel. Moreover, there is a waiver of penalties and interest over this period, of COVID -19. The government is also expediting payment of VAT refunds. Additionally, there is deferral of remittance of corporate tax and Pay As you Earn by businesses until September 2020.

In Tanzania, there has been no measures towards benefiting the tourism sectors. General incentives that could benefit the sector include, reduced employee tax introduced through the Tanzania Finance Act 2020.

For Ethiopia, the banks have reduced the interest rates for a period of 6 months that would benefit the tourism sector. On the tax side, there is a tax amnesty for all businesses. Moreover, any business that makes losses over this year is allowed to carry forward the losses indefinitely.

Overall, the discussion was very insightful. On the tax measures in tourism sector in Ethiopia, Uganda and Tanzania. You may listen to the full discussion here.

Please also have a look at our upcoming discussions here and join in.

Our gratitude goes to the panelists, Jacqueline Matiko from Tanzania, Rwothumio Emmanuel from Uganda and Fitsum Haile from Ethiopia.

Should you have any tax question please contact us and also at our affiliate on tax discussions here.



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