Zimbabwe’s Minister of Tourism Walter Mzembi has appealed to the government to reduce the controversial 15% VAT on tourism accommodation for foreign tourists to 5% in order to grow the sector. Earlier this year, Mzembi lobbied to have the tax removed altogether.
Mzembi was quoted in the New Zimbabwe as saying: “I bring from the sector a suggestion to incrementally introduce VAT within a range of 5% to 15% aligned to our 2020 vision to give the industry an opportunity to recover and grow rather than to impose abruptly a full blown 15% tax that will certainly kill the goose.”
Tourism industry players have applauded Mzembi’s ‘bold’ initiative, which they say shows his deep understanding of tourism and the benefits it can bring to his country’s GDP. Says Nigel Vere Nicoll, Chief Executive of the African Travel and Tourism Association (Atta): “Atta has always recommended a reduction in VAT within Africa on tourism product, as it is proven that countries with lower VAT rates emerge as more competitive destinations for potential visitors, as well as encouraging a greater volume of domestic travel and tourism.”
The impact of the VAT, which was introduced in January this year, has been felt throughout the Zimbabwean tourism sector. Africa Albida Tourism Chief Executive Ross Kennedy explains that with all new taxes, levies and fees, it takes some time for the impact to be genuinely felt, and meaningfully measured in any considered manner. However after seven months of collecting stats and receiving travel trade feedback, Kennedy says it is now clear that the introduction of 15% VAT has caused the Zimbabwe tourism industry some negative responses and down turn in arrivals.
Source : Atta
19 August 2015