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ZIMBABWE has collected up to $1,6 million in taxes levied on non-resident tourists in the four months to April, despite industry protests that the levy has made the country an expensive destination and is slowing the sector’s recovery, Parliament heard on Monday.
Finance Minister Patrick Chinamasa announced the 15 percent value-added tax (VAT) on foreign tourists’ payments for accommodation and tourism-related services in his 2015 budget last November, as part of measures by the government to raise revenue.
The tax came into effect in January this year.
The levy has, however, been largely contested with the Minister of Tourism and Hospitality Industry Walter Mzembi and players in the sector lobbying for its removal.
Finance Ministry Permanent Secretary Willard Manungo told a Parliamentary Portfolio Committee on Tourism that the levy charge was consistent with developments in the region and had raised $1,6 million between January and April.
“Tanzania is on the upper end, applying 18 percent while Seychelles and Mauritius both charge 15 percent,” said Manungo.
“South Africa charges 14 percent while Botswana charges 12 percent. Zambia is the only country in the region, which doesn’t have the levy in place.”
Tourism is one of Zimbabwe’s main foreign currency earners, generating $827 million in 2014, down from $856 million in 2013.
Zimbabwe’s tourist arrivals increased by 2,6 percent to 1,880,028 in 2014 from 1,832,583 recorded the previous year, but the figure was still below the overall regional growth of seven percent.
Mzembi has said Zimbabwe can achieve a $5 billion economy by 2020 with tourism contributing more.
He said the government through the Ministry of Tourism and Hospitality Industry had put in place a new National Tourism Policy that seeks to re-define tourism, which has in the past been defined based on a euro-centric zoning approach along a constricted band from Victoria Falls, Kariba, Masvingo and Matopos.
The National Tourism Policy, said the minister, was intended to address bottlenecks to travel, such as air connectivity; restrictive visa regimes and processes; poor road access; poor utilities; which all restrict the enjoyment of the tourism product and seeks to support and encourage women’s initiatives in main stream tourism and sustainable community-based tourism projects.
“A $5 billion Tourism Economy by the year 2020 is clearly not a dream. It’s achievable. What we should be asking ourselves is what are we not doing right that continues to stifle our growth? That continues to make us revise even our statistics downwards, when we should be aiming for a bigger and larger economy?” he said.
The minister has said the country needed to increase investor confidence by improving international ranking in terms of ease of doing business. – The Source/Business Reporter
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