Hunting blocks, trophy hunting fees: Who is missing out on the boat of change?


IPP MEDIA

2007-08-28 10:18:22
By Nimi Mweta


Adapting to new conditions in the tourism sector might prove a little difficult with hefty rises in hunting fees, licenses for hunting blocs as well as trophy hunting, raised by 500 per cent at the start of the financial year.

Reports say that plenty of demands for the reviewing of this increase are being made but to no avail, with Prof. Jumanne Maghembe, the minister for Natural Resources and Tourism, saying protests arise from lack of ability to change, on the part of tourism stakeholders.

But is adapting to change only one-sided?
One question that crops up is whether the government made a change of the structure of fees in the tourism sector on account of positive economic review, or rather the pressure of public opinion, including legislature demands.

When one picks the first response as the minister was likely to assert, that this is a review and the stakeholders need to condition their mindset to adapting to change, a difficult question follows, as to what routine was followed in making a review. For it is one thing to raise fees by 50 per cent, not 500%.

In a routine interpretation, it can be said that there are parallels between price hikes and tax hikes, that the same manner in which budgets are rolled out, changes in taxes are also supposed to reflect those quantities, parameters, ratios or consideration.

Thus it was quite a huge effort for education or other sector to get double of its previous mark, and chances are that there are substantial new contributions from elsewhere for that purpose. Were the latter not the case, it implies that the government was oblivious of those issues until now.

That is the impression that is similarly created in the tourism fees structure alteration, that it represents a situation where the government was totally unaware of what constitutes an appropriate taxation level, in all those areas.

Were it that this change arises owing to the formation of the Tanzania Revenue Authority (TRA), or it was a matter of collecting vast more cash on account of closer supervision, that would �procedural.� But making such a huge change in fees while the TRA exists since 1996 means it isn�t just procedural shifts.

In a strict policy or dialogical sense, there is as much possibility of stakeholders in the tourism sector to object to change, the way portions of car owners objected to raising fees to 80,000/- from the lackadaisical 20,000/- flat rate.

It would also suggest that there is as much change in the tourism hunting fees as in the car ownership fees structure, informed by similar consideration, and thus a change in like manner. Yet this supposition is axed at the next stage, as car owners include a vast local lobby, not quite the case with �trophies.�

There are comparisons between the change in car fees structure and trophy hunting fees structure only in one sense, that they are comparable shifts in licensing conditions but for altogether different reasons.

In the car fees structure, the government shifted from nearly a laissez faire situation (that is, of paying scarcely no tax for vehicle ownership) to its being made a taxable quantity, a source of revenue rather than a sort of accessory to proper duty, that is, fuel taxes.

In the tourism or trophy hunting fees structure, there was a different sort of action, where economic taxation was ended in favour of equalization or participatory taxation, the reason being loud demands by the public, of �new tax sources.�

What was being called �new� in the demands after the budget estimates were presented looked a little astounding to habitual taxation practice, but it is undeniable that these ideas (especially by opposition spokesmen) soon became common sense.

One such idea that it is unlikely the government will move to implement is to seek that annual fees for the use of Dar es Salaam ports by container laden ships be moves from $10,000 per annum to $80,000 - which would represent an 800 per cent increase. It is even heavier.

Thus raising trophy hunting and related licenses by 500 per cent distantly resembles like picking up bits and pieces of the opposition budgetary position and making use of it - but in this particular case the changes had already been decided by June.

Thus they may have been buttressed by the tone of public discussion on the budget but were by no means just a result of those discussions.

Yet in comparison with last year�s taxation structure, and its carry over from the third phase administration, how proper is this �titanic� shift of focus?

For the mood existing in the country is one of punitive taxation for all investment areas, a clear shift from what is considered to be `improving the business climate,` which means observing equity, by which is meant taking into account �average levels of profit.�

It may not be altogether useful to demand from the minister if trophy hunting taxation since, say, 1996 did not take into account concerns of equity, or in what manner this has changed - even in comparison to last year�s budget.

The reason doesn�t seem to be found in the way taxation was being done in the first place, but pressures the government would be facing.

That is where the problem arises, in terms of economic strategy, and thus in relation to a mapping out of prospects from this moment, both in a sector context and outside, that is, the wider economy.

It is evident that this enhanced taxation arises from the usual error in our economic thinking, that national development, poverty alleviation as it is preferably called these days, is based on the collection of revenues.

If this thinking was right, the third phase should have engendered more hope than the second phase, but that isn�t right.

Tied to that question is how far the measure could affect trophy hunting visits, which is partially inelastic to changes in fees, assuming that not many countries can offer similar facilities.

If there is little competition in that area, on the basis of the fact that we have far greater game reserves or game controlled areas, and our population is thinly stretched out on border regions rather than the vast hinterland from the coast, it may work. But there is a lingering bit of doubt as pressures for huge taxes have always existed, but were resisted.

Such an impression leads to privileging the idea that since the early stages of the TRA or third phase administration generally, it is well known that `punitive` taxation of trophy hunting or such other has negative effects on the sector.

But the level of pressure wasn`t as high for certain reasons, one being that the country`s purchasing power abroad was still good, and local trade policies rather comfortable for poor people.

This gradually changed and `small commerce` was pushed to the fringes, artisans� mining throttled as bureaucrats rushed in with investors wherever some gold could be found, and no `trickle down effect` is noticed. The solution becomes to multiply the taxation to gain in revenue.

SOURCE THE GAURDIAN

I feel like the caveman in the insurance commercial. What the heck did the guy say?

Have you noticed that no one from the papers in Tanzania or the Tanzanian government have addressed the retro-active nature of the new fees or how they effect those who have already made plans (relying on the agreement to give 6 months notice of increase).

I believe that he, in essence, said this: The overall solution to Tanzania's marked drop in certain areas of the country's known economic revenues is to simply multiply taxation in other economic areas to gain the revenue back. And, according to their line of thinking, it's important that you do it in order to help the economy remain stable or growing and to deal with poverty alleviation. So, to their thinking you do it through punitive taxation in different economic revenue areas like trophy hunting or increasing the tax on owning a car there. In regards to trophy hunting, even though it may have negative effects, they are looking at it from the standpoint that there are not many other countries that offer similar facilities such as greater game reserves, game controlled areas, etc. So, that seems to be their simple African justification. And, as long as people put up with it, it will work, until the revenues drop in trophy hunting and then they will have to place their punitive taxation scheme on something else.

This type of policy only makes sense when the practitioners are utterly ignorant of basic economics.

There is nothing that a well-meaning fool can't destroy.

I thought all the communists had left Tanzania...guess I was wrong.