ZIMBABWE’S fragile tourism recovery is facing an unnecessary setback following the government’s abrupt adjustment of value-added tax (Vat), a move that risks eroding competitiveness in one of the country’s most promising sectors.
Hospitality concern, Victoria Falls Safari Collection, has indicated it will partially shield customers from the impact of the new tax measures that took effect this month.
In November last year, Finance minister Mthuli Ncube raised Vat to 15,5% and proposed applying the standard rate to services offered by designated tourist facilities, including safaris and hunting, regardless of classification.
Treasury has justified the move by arguing that widespread lobbying for Vat exemption has created inconsistencies, distorted tax policy, weakened compliance and resulted in significant revenue losses to the fiscus.
While that argument may hold in principle, its tourism application exposes a troubling disconnect between fiscal policy and how the industry actually operates.
In a notice to clients, Victoria Falls Safari Collection said it would absorb the additional 0,5% Vat on accommodation. However, it made clear it could not absorb the full 15,5% Vat now imposed on activities and transfer services that were previously zero-rated. The burden will inevitably be passed on to customers — many of whom made and paid for bookings long before the tax change was announced.
Tourism products are sold well in advance. Safaris, tours and transfers for 2026 were contracted and priced as early as mid-2024.
By introducing a Vat change at the end of 2025 and enforcing it from January 1, the government has effectively imposed a retroactive cost on operators who had already locked in prices. This is not reform; it is a regulatory ambush.
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Operators are left with two unpalatable options: absorb costs that erode already thin margins or alter contracts with clients, risking reputational damage, disputes and cancellations. Either way, confidence takes a hit.
This comes at a particularly inopportune time. Zimbabwe is enjoying a rare positive momentum after being named the world’s best country to visit in 2025 by Forbes.
The sector is projected to grow by 3,1%, with international arrivals expected to rise to 1,87 million from 1,79 million in 2025, driven by increased visibility of Victoria Falls, Hwange National Park and the Eastern Highlands.
Yet Zimbabwe does not sell tourism in isolation. It competes directly with South Africa, Zambia and Botswana — destinations perceived as offering better value for money.
Concerns that Zimbabwe’s tourism product is more expensive than those of its regional peers are being reinforced by a tax policy that raises costs at the most sensitive point: experiences.
Activities such as safaris, river cruises, guided tours and adventure offerings draw visitors across continents.
Tourists do not travel thousands of kilometres to sleep in hotel rooms they could find at home; they come for unique experiences. Taxing these experiences aggressively undermines the very essence of the tourism product.
Tourism remains one of Zimbabwe’s low-hanging fruits. It earns foreign currency, with a haul of US$922 million between January and September 2025, up from US$839 million recorded over the same period in 2024.
The sector creates jobs and projects a positive national image at a time when the country urgently needs one. Undermining it through abrupt, poorly-timed fiscal measures is tantamount to shooting oneself in the foot.
As things stand, Zimbabwe could be taxing its success story. The tax ambush sabotages the growth of the billion-dollar sector.
