Tanzania rolls out bold reforms to spur tourism growth

Dodoma. The government has unveiled a raft of fiscal and policy reforms aimed at accelerating growth in the tourism sector, which has become one of Tanzania’s leading sources of foreign exchange earnings.

The measures—announced as part of the 2025/26 national budget—include reducing the hotel levy from 10 percent to 2 percent, introducing mandatory travel insurance for foreigners entering the country, and restructuring how revenues from tourism-related activities are shared among government entities and communities.

“The objective is to reduce the cost of doing business and investment in the country,” said Minister for Finance Dr Mwigulu Nchemba when tabling the budget in Parliament on June 12.

“This drastic cut is designed to stimulate investment in the hospitality industry and enhance Tanzania’s competitiveness as a tourist destination.”

The proposed hotel levy reduction is expected to reduce government revenue by TSh9.78 billion, but the government sees it as a strategic trade-off to encourage sectoral growth.

The move comes amid impressive performance in the tourism sector, with visitor numbers rising from 1.18 million in 2020 to 5.36 million in 2024.

Revenue from international tourists surged from $715 million to $3.9 billion during the same period.

“Tourism has placed Tanzania on the global map. We were ranked ninth worldwide and third in Africa in 2024 in terms of growth in tourism earnings post-COVID-19,” Dr Nchemba said.

“Additionally, Tanzania was named Africa’s Leading Tourism Destination for 2024, while Serengeti National Park retained its title as the world’s best national park for five consecutive years.”

To further bolster the sector, the government is introducing a $44 travel insurance fee for all non-EAC and non-SADC foreigners entering the country.

The insurance will cover travel-related medical emergencies, repatriation, accidents, and baggage loss for up to 92 days. It will be managed in partnership between the National Insurance Corporation and the private sector.

“This initiative aligns with global best practices and ensures that tourists receive necessary protection while visiting Tanzania,” the minister said.

“It also provides a predictable and structured way to address emergencies.”

Additional reforms include reducing the annual registration fee for large-scale food outlets, such as supermarkets and tourist hotels, from TSh200,000 to TSh150,000.

Moreover, approved accommodation facilities previously categorised as Group A and B will be consolidated under a single classification to streamline licensing and regulatory processes.

Correspondingly, the licence fee will drop from $800 to TSh766,500.

Beyond incentives, the government is also amending key pieces of legislation to enhance local benefit-sharing.

Notably, the Wildlife Management Act (CAP 283) and the National Parks Act (CAP 282 and CAP 284) will be revised to grant conservation authorities and communities bordering protected areas greater access to tourism revenues.

“Honourable Speaker, I propose to amend the Wildlife Management Act, CAP 283,” said Dr Nchemba, outlining new revenue-sharing arrangements aimed at strengthening community participation in wildlife conservation.

“We are now restructuring the revenue distribution model to increase allocations to village councils, district councils, and Wildlife Management Areas (WMAs), thereby strengthening community-based conservation.”

For instance, 65 percent of revenues from photographic tourism in WMAs will now be directed to the WMAs themselves, while concession fees from the same activity will see 85 percent channelled to the same local entities.

Revenues from resident hunting will also be redistributed, with 50 percent going to the WMA and 35 percent to district councils.

In national parks, the budget proposes that 51 percent of revenues collected by the Board of Trustees be deposited in a special account at the Bank of Tanzania, with only 40 percent going to the Consolidated Fund.

This marks a shift from the previous provision where 91 percent was remitted to the central government.

“These changes reflect our commitment to empowering conservation agencies and communities to reinvest in tourism infrastructure, protect biodiversity, and uplift local livelihoods,” the Minister said.

As the government presses ahead with its ambitious tourism roadmap, stakeholders will be watching to see how the reforms affect cost structures, investment flows, and the delicate balance between conservation and commerce.