Zanzibar's Liquor Import Issues Impact Economy

The Zanzibar Revenue Authority (ZRA) has conducted an investigation into recent changes in the issuance of liquor import licenses, which revealed significant issues leading to tax losses between January and June 2024.

These issues, which include corruption, tax evasion, and inadequate business record management, have made the changes ineffective.

The investigation found that licensed alcohol importers in Zanzibar lack proper systems for managing their business operations, particularly in stock control and compliance with electronic receipt issuance. This has contributed to substantial revenue losses for the ZRA.

Additionally, Zanzibar has been experiencing a severe alcohol shortage, leading to a sharp increase in alcohol prices, particularly beer, which has seen prices soar by almost 100%.

The shortage was initially caused by delays in the licensing process by the Zanzibar Liquor Control Board (ZLCB), affecting both existing and new importers. This situation is particularly concerning given the significant role that tourism plays in Zanzibar’s economy, accounting for about 90% of its foreign revenue