eBusiness Weekly
Michael Tome
Operations for companies in the tourism and hospitality industries are set for a major boost after the Government removed some of the burdensome taxes levied on the sector.
The move is meant to ensure the firms’ competitiveness regionally and internationally is enhanced.
Environment, Tourism, and Hospitality Industry Minister, Mangaliso Ndlovu, said the decision follows deep concerns by sector players that have continuously cited numerous taxation weighing heavily on their businesses.
According to commentators, this has led Zimbabwe to be an uncompetitive tourism destination, causing vacationers to bypass Zimbabwe’s tourism offerings settling for other cheaper regional destinations.
Some of the taxes levied on the hospitality industry operators include the tourism business licence fee, national parks, and wildlife fee, Ministry of Transport fee, travel agent permit fee, external tour operators’ permit fee, car hire permit fee, houseboat permit fee all under the Operators Act.
The operators are also obliged to remit performance rights fee under the copyright act to the Zimbabwe Music Rights Association (ZIMURA)and television licences fee for every room.
Some of the acts that require payment from operators include the Tourism Act, tourism policy, Liquor Act, Environmental Management Act and the Indigenisation and Empowerment Act.
While addressing delegates that attended the hospitality congress held in Harare on Thursday, Ndlovu indicated that the high cost of tourism services in the country was detrimental to the growth of the local sector.
He said his ministry was pushing for a consolidated taxing system that would enhance the competitiveness of the struggling local tourism sector.
“The issue of higher cost of doing business in Zimbabwe, is highly prohibitive. We do have a committee which is looking at these issues. We have streamlined taxes that the sector is facing and our desire first is to have these (taxes) consolidated under one taxing system so that we do not have to go through all those doors to pay taxes, but certainly to make sure that these are significantly cut down.
‘‘I think this will go a long way in making sure that we are competitive in the region and globally,” said Ndlovu.
He went on to highlight initiatives being undertaken by the Government to enhance the growth and visibility of the local tourism sector on a global scale.
He said: “I urge industry players to continue to work hard as we walk our journey towards a $5 billion tourism economy by 2025. The ministry remains a willing and strong partner in this journey and will continue to advocate strongly for sector-specific incentives and support mechanisms to support investments by the private sector.”
Renowned economist John Robertson, implored the Government to reconsider its taxing system on the sector as heavy tax burden was translating to high cost of tourism facilities to vacationers, thus an expensive tourism destination burden being transferred to vacationers hence.
Robertson said pricing of some local hotels was equivalent to some top hotels in the world, which was not a positive development for the growth of the local hospitality industry.
“A hotel room in Harare may cost you the same amount as a hotel room in New York, London, Washington or Paris, this is wrong we should not be having fees that are so heavy that it makes us uncompetitive as a country as we try to attract tourists.
“May I urge your Ministry to support all the efforts being made to reduce the tax burden on the hospitality industry. There is a great deal of taxation applied to the members of this industry and I believe that these should be amended. We did see a slight reduction in the VAT charge to tourist earlier this year, which said if you are a foreigner you do not to pay VAT on certain other bills,” said Mr Robertson.
Codenamed: “Re-imagining and navigating the tourism and hospitality recovery journey”, the hospitality congress came at a time when the global travel and tourism sector has been hard hit by the novel coronavirus which has forced most of the industries down to their knees.
Globally, international tourist arrivals dropped by 65 percent from January to May this year.
Arrivals into Africa during the same period fell by 81 percent compared to last year while arrivals into Zimbabwe during the first half of 2021 decreased by 72 percent.
