IN a move to boost the aviation industry in the country, the government has expressed its intention to make amendments to the Value Added Tax (VAT) Act on various issues that will enable the industry to perform well.
Minister for Finance and Planning, Dr Philip Mpango, told Parliament when tabling the 2019/20 national budget on Thursday that the government looked forward to improving Tanzania’s aviation industry and that some measures were being taken to improve the environment of doing businesses in the area.
He said the government through the Ministry of Finance and Planning intended to make amendments to the VAT Act to create an enabling environment for airline operators to engage in productive business.
On the VAT Act (Chapter 148), the Minister said the government proposed to amend item 11 in the second part of the exemption schedule to the VAT Act to exempt aircraft lubricants imported by domestic operators, the national air force or airline corporations recognised in the bilateral air service agreement.
He said the measures would enable the country to sign bilateral air service agreements, which the country could not be able to sign due to the absence of such exemptions.
The minister added that the government proposed to amend the second part of the exemption schedule to the VAT Act to include airline tickets, flyers, calendars, diaries, labels and employees’ uniforms of the airline operator.
According to Dr Mpango, the items will only be exempted if they are imported by the airline recognised under bilateral air service agreements.
“We are doing all these so that the government can sign bilateral air service agreements and thus boost airline business in the country,” he noted.
The fifth government has so far managed to revamp the national carrier - Air Tanzania Company Limited (ATCL), whereby up to April, this year, six new planes have been purchased and are already in operation for domestic routes.
“ATCL airplanes are already in operation in various parts of the country. We have also launched routes outside the country. This is crucial for the country’s economic growth,” he said.
So far, ATCL operates in Dar es Salaam, Mwanza, Bukoba, Kigoma, Tabora, Songea, Mbeya, Dodoma, Iringa, Mtwara, Arusha and Mpanda.
On international routes, the company operates Dar es Salaam-Lusaka (Zambia), Hahaya-Comoro, Harare (Zimbabwe), Entebbe (U ganda) and Bujumbura (Burundi).
Moreover, new airplanes, Boeing 787-8 Dreamliner and Bombardier Q 400, are expected to be delivered at the end of 2019.
In the near future, the national carrier is expected to start flying to Mumbai (India), Johannesburg (South Africa) and Guangzhou in China.
The improvement of air transport is expected to contribute to the growth of trade and the tourism sector.
Moreover, strengthening of air transport has gone along with the improvement of infrastructure.
Dr Mpango said the government had successfully managed to complete the construction of Terminal III and its supportive infrastructure at Julius Nyerere International Airport (JNIA).
He said Terminal III had the capacity to handle six million passengers annually.