Tanzania: Vat Exemption On Air Charters Thrills Operators

THE government decision to grant a value added tax (VAT) exemption on sale and lease of air charters has won the hearts and minds of aviation industry players.

Tabling the 2023/24 budget in Parliament on Thursday, Finance and Planning Minister, Dr Mwigulu Nchemba proposed a VAT exemption on sale and lease of air charters, breathing a collective sigh of relief to the aviation and tourism stakeholders.

“I propose to amend part I of the schedule to the VAT Act, Cap. 148 to include a VAT exemption on sale and lease of aircraft, aircraft engine or parts by a local operator of air transportation” Dr Mwigulu said in his budget speech.

This means that the government wants to reverse its measure taken in the financial year 2022/23 on supply of air charter services, as it seeks to complement the efforts of reviving tourism industry along with the invaluable move of President Dr Samia Suluhu Hassan of promoting Tanzania as a tourism and investment destination, through the Royal Tour film.

Indeed, Dr Mwigulu said: “The VAT exemption measure intends to support the growth of aviation industry and reduce business and investment cost”.

The Tanzania Air Operators Association (TAOA) board Chairman, Captain Maynard Mkumbwa welcomed the government move, saying it offers enormous opportunities for the key economic industry to grow by leaps and bounds.

“This has been our grave concern all along. However, TAOA appreciates the government for being considerate. Our earnest gratitude goes to the President Dr Samia Suluhu Hassan for her painstaking efforts to create conducive business environment,” Captain Mkumbwa noted.