What Has Changed?
The Finance Act, 2026 amended Paragraph 25 of Part II of the First Schedule to the VAT Act by introducing definitions of “tour operator” and “in-house supplies.”
Who Is a Tour Operator?
A “tour operator” means a tour or safari operator licensed by the competent authority responsible for regulating and overseeing the tourism sector.
What Are In-House Supplies?
“In-house supplies” include supplies made using a tour operator’s own resources, or services bought from third parties but materially altered so that the final supply is substantially different.
What Does This Mean?
The amendment clarifies the scope of the VAT exemption for licensed tour operators and qualifying tour services, while excluding in-house supplies from the relief.
Tour operators will therefore need to distinguish carefully between exempt tour services and taxable components, with possible implications for pricing, contracts and VAT documentation.
Practical Takeaway
Tour operators should review their licences, service packages, supplier arrangements, contracts and invoices to identify which components qualify for exemption and which in-house supplies may remain taxable.
Source: Finance Act, 2026 — Paragraph 25 of Part II of the First Schedule to the VAT Act.
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