Zanzibar urges hotels adopt digital systems for taxes

ZANZIBAR: THE Ministry of Tourism and Heritage, in collaboration with the Zanzibar Revenue Authority (ZRA), has urged business operators, especially hotel owners, to adopt a Property Management System (PMS) to improve transparency and accuracy in revenue reporting.

Acting Minister, Mr Mudrik Ramadhan Soraga said the failure of some hotel owners to use the system has hindered the government from collecting accurate taxes.

He insisted the importance of adopting the improved PMS, noting that it will help curb revenue leakages that previously went undetected.

“The hotel sector contributes significantly to the national economy, so there must be a strong, transparent, and fair tax collection system and this must be implemented by all hotel owners and business operators,” he said.

Mr Soraga said that the government introduced various strategies to enhance tax collection, including electronic systems that simplify tracking of hotel revenues.

“All hotels must be registered and use electronic fiscal devices to issue receipts, ensuring that any income is properly recorded and taxes are paid on time,” he added.

He noted that the government previously faced significant challenges due to revenue losses and lack of accurate data on tourist arrivals, including length of stay and spending patterns.

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According to Mr Soraga, tourism contributes about 30 percent of Zanzibar’s GDP, but actual revenue figures remain inaccurate due to tax evasion. Further, he said that tax revenues are vital for financing development projects such as infrastructure, healthcare, education, and improving the investment climate.

Meanwhile, Mr Soraga warned hotel owners to comply with tax laws, stressing that the government will take firm action against defaulters. He directed all hotel service providers to register in the system before April 24, 2026, noting that failure to comply will constitute a violation of the law.

“We want all hotel operators to register, as this system will also help us accurately assess government revenues that previously had loopholes,” he said.

Mr Soraga assured stakeholders that the government will continue to provide education and simplify procedures to attract more investors into the tourism sector.

Meanwhile, Biubwa Omar from the Zanzibar Association of Tourism Investors (ZATI) said the success of the system will depend on proper oversight to ensure accountability and enable the government to collect due revenues.

Omar called on service providers to cooperate fully to ensure the system’s success and contribute to national development.