The shortage of literature regarding the tax administration burden, particularly in the hospitality and tourism sector in the context of least developed countries, still exists. This study, therefore, investigates the tax administration burden in the tourism sector in the Zanzibar Islands. It specifically examines the structure of tourism taxes and the fiscal regime, measures the uncertainty and complexity of tax laws, and assesses the role played by business associations in facilitating collective action to reform the business environment of the tourism sector in this Archipelago. The study involved a survey of stakeholders ( N = 135), including tourism investors, business associations, and relevant government agencies. The findings showed that uncertainty concerning the value added tax laws centered on calculation of the input tax, the input tax refund from mainland Tanzania, and the registration procedure. The confusion was also pronounced regarding the specific laws affecting tour operators, restaurants, and the hotel levy. Similarly, there is still uncertainty concerning the infrastructure tax and the imposition of a tax of US$1 per day per guest staying in a hotel. Moreover, uncertainty and complexity regarding the income tax laws is centered on calculating the income tax liability of businesses, investments, and employment. However, the role of business associations in reforming the business environment for tourism has been encouraging, as a good number of public–private dialogues and initiatives have been geared at negotiating the various forms of taxes and levies imposed on tourism and hospitality services in the Archipelago. The study concludes with managerial, policy, and research recommendations.
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