African Union Proposes Tourist Tax To End Reliance On Western Cash

African Union Proposes Tourist Tax To End Reliance On Western Cash

The Organization of African Union, faced with a $380 million budget for 2014 and criticized for being dependent on Western cash, proposes a tourism tax to raise funds from members.

The proposal is for African countries to charge a $2 tax on hotel rooms in Africa and $5 or $10 on flights to and from African countries. The funds would then be channeled to the African Union’s coffers, according to a blog at BeyondBrics.

African countries that rely heavily on tourism object to the proposal, according to the report.

A.U. leaders approved in principle the funding proposals outlined in a report entitled the Alternative Sources of Financing the AU. The document will be considered by the A.U.’s conference of finance and economy ministers, then will be up for discussion again in January.

Questions surrounding the tourism tax include: Will member states pay up? Will the tax bleed the tourism industry and conflict with the A.U.’s goal to foster economic prosperity? Should visitors to Africa help the A.U. pay its way?

Tourism giants on the continent such as Kenya and South Africa could be hit hard, according to Kenya-based Nadia Ahidjo, a consultant at Africa Practice.

“Given member countries’ historical reluctance to provide the basic membership contributions that would keep the organisation running, a scheme that proposes taxation of the tourism industry is unlikely to be adhered to, whether by countries where it is highly profitable like Kenya or others for which it isn’t so,” she said in the All Africa report.

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Kenyan tourism revenue fell 2 percent in 2012 due to the global crisis and political tensions leading up to elections, Ahidjo said. The World Trade Tourism Council predicts, however, that toursim revenue will rise at 4.3 percent a year through 2017.

New taxes on flights in Africa could significantly harm airlines already challenged by paying premiums on jet fuel, said Linden Birns, a Cape Town-based aviation analyst.

Zambian President Michael Sata was quoted in The Times of Zambia saying, “If we start charging levies on travels and hotels, the people will rise against us.”