Incentives And Tourism Development In Tanzania: A Case Of Zanzibar

ABSTRACT

This study intended to examine the impact of incentives and tourism development in Tanzania: A case of Zanzibar. The research was carried out at Zanzibar Investments Promotion (ZIPA), Tanzania Revenue Authority (TRA), and Zanzibar Commission for Tourism (ZCT) and some International Hotels. A total number of 50 respondents were involved in the study. The study was guided by the following objectives: to identify the role of tax holiday in the development of tourism in Zanzibar, to investigate the significance of investments allowance in the development of tourism in Zanzibar, to determine the impact of corporate tax in the development of tourism in Zanzibar, and to assess the impact the hotel charges in the development of tourism in Zanzibar. Data were collected through questionnaires, interviews and Documentary Review. Respondents were selected through random sampling methods. Data were analysed by SPSS and MS-Excel. Thus, both qualitative and quantitative methods were collectively employed in the process of collecting, analyzing data required for this research. The findings of the study revealed that incentives are the one among of the major factor for tourism development in Zanzibar. Tax holiday play important role in attracting the tourism investments as well as improve the government revenue. Investment allowances ppromote the investors to invest in Zanzibar. Corporate tax relief stimulates the tourism investment flow and increase employments creation in the study area. Also it was found that its hotel charges are moderate and they increase international arrivals. Furthermore, the study recommended that, regulatory framework and supervision should be effectively made to make sure that investors do not make any fraud to vi escape taxation after expiring the time of tax holidays. Also, the government should consider other factors such as political stability, infrastructures development and market promotion. Indeed foreign investors do consider much these factors before making investment decisions.