Over 10 hotels, camps in Sh1.8bn tax scam

The Ngorongoro district council chairman, Mathew Siloma told the Guardian on Sunday at the start of the ultimatum yesterday that his office would be prompted into closing the hotels if they failed to settle the debt in two weeks.

“Tourism is the only reliable source of earnings for the council; so if they don’t pay their dues they deny us means to provide the people with basic services,” he said, reiterating on the local governments’ jurisdictional powers over the hotels and the tourist industry in the district.

The 1982 Local Government Finances Act (LGFA) as amended in 2012 provides powers to local government authorities to collect revenue including 0.3 per cent worth service levy from their own sources.

“We demand all hotel investors in the area to settle their obligations to avoid embarrassment from us and disruptions of the tourism industry and even for them not to cause frustration to their clients,” he said.

Siloma was referring to Ngorongoro Sopa Lodge, Nomad Tanzania , Rhino Lodge, Ngorongoro Crater Lodge and Unique Safaris.

Others in the black book were A & K Tanzania Ltd, Ndutu Safari Lodge and Leopard Tented Lodge in Ndutu area in Ngorongoro Conservation Area Authority (NCAA), Gurumet Expeditions, Sokwe Asilia, Masai Giraffe Eco lodge and Savannah Camp.

However, the District Executive Director Julius Mgalula acknowledged controversy in the service levy tax law, leading to the Hotel Association of Tanzania (HAT) to protest through lodging an application at the High Court against Ngorongoro District Council.

But HAP lost the court battle in favour of the Council, apparently mandating the later with the right to collect hotels service levy in the area. The court ruled that a corporate entities, hotels and tented camps would pay service levy to their respective local government authorities.

At issue is a law provided under section 7 (1) (aa) of Local Government Finance Act, Cap 290 of the R.E laws of Tanzania as amended by section 35 and 36 of the Finance Act, 2012.

“We do not give any tax exemption to hotel owners. The court ruled in our favour and so the hotels have no choice but to honour the decision,” he said, adding that the council earned 80 per cent of it revenues from torurism.

Commenting, Manager of the Tanzania Tour Operators Association (TATO), Sirilli Akko said he was very much familiar with situation, urging members of his association to comply with the authorities’ demand.