Tourism sector seeks tax reviews

TOURISM players have pleaded with Treasury to review the 15% value-added tax (VAT) on foreign accommodation, the 2% transactional tax and duty exemption for car rental owners in order to make the country a cheaper destination ahead of the budget presentation next Thursday.


Tourism Business Council of Zimbabwe president Tich Hwingwiri told a media briefing yesterday that the industry had made submissions to the Finance ministry seeking the extension of the duty-free import facility on capital goods to allow the industry to recapitalise.

“We had an opportunity to make recommendations in terms of what industry looks forward to in the upcoming budget. I think first and foremost is the issue of duty-free that we have been enjoying, we applaud government for that,” Hwingwiri said.

“The facility has been there, but the money has not been there for players to bring in capital goods. Our desire is that let it still remain. It will help the industry to recapitalise, as we present our products to the international community. We have to remain competitive.”

He added that the sector was asking government to put in place a revolving fund of at least $100 million with affordable interest rates.

“The second one is that we are saying is there a possibility of a revolving fund, where operators can come in and tap from with interest rates which are quite affordable and give them time to breathe? So we have put these recommendations to the minister and we hope that it will be practical. The third one is that of our car rental businesses. A lot of these have been exempted from these benefits, meaning they can’t enjoy the duty-free imports. We want our car rental business owners to come in and bring their cars duty-free,” Hwingwiri said.

The 2% transaction tax and the 15% tax on foreign accommodation was making Zimbabwe an expensive destination.

“There has been an issue of the VAT charged on foreign guest accommodation. We have spoken about that several times. We felt that it made our destinations quite expensive,” Hwingwiri said.

“Then on the 2% tax on transactions, what industry is simply saying is that we are a formal industry and we have continued to contribute to the fiscal and, yes, we know exactly who is targeted by the 2% transactional tax, (but) the more we are loading onto the cost structure, the more expensive our destination becomes.”

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1 Comment

  1. We also have to pay 2% tourism levy on all income on top of the 2% tax and 15% VAT. It is a case of ‘milking the cow while it is still alive.’ Not sustainable.

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