Tourism rebate turned into a ‘big boys’ affair

The ZTA said about US$1 billion was wiped out of the industry during the same period, amid extensive disruptions to the global airline system.

ZIMBABWE’S biggest tourism firms have benefited from a post-pandemic rebate established to rebuild the industry, the Zimbabwe Independent was informed this week.

The Covid–19 scourge fizzled out late 2021, after hard lockdowns grounded the global tourism industry for almost two years.

Arrivals plummeted by about 90% in 2020 – the biggest such fall in 40 years, according to Zimbabwe Tourism Authority (ZTA) data.

The ZTA said about US$1 billion was wiped out of the industry during the same period, amid extensive disruptions to the global airline system.

Former tourism minister Mangaliso Ndhlovu introduced the rebate system, which allowed companies to import capital goods duty free, after authorities weighed in on several options.

But this week, Wengayi Nhau, president of the Tourism Business Council of Zimbabwe (TBCZ), said tough conditions under the rebate system discriminated against small players.

He warned that without revisiting the current rebate regime, quicker recovery would only be felt in big companies.

Nhau, who spoke exclusively about the hurdles confronting companies as they tap into the rebate, said the concession alone would not be enough to rebuild the country's tourism industry.

However, when government opened the window in 2022, it became a nerve centre of abuse by some companies, according to reports.

Government tightened the screws.

“They are saying for a tour operator to import vehicles, it needs to be a brand new vehicle,” Nhau told the Independent.

“When you look at small upcoming operators, they have no capacity to buy brand new vehicles. What we are assured of is that they are able to buy second-hand vehicles either from Japan or South Africa at competitive prices.

“If there can be a cap of three to five years on duty free rebate on second-hand vehicles that will capacitate small operators because raising big amounts to buy brand new vehicles on its own is a big deal.

“Companies with capacity to buy brand new vehicles will benefit and smaller ones will not. This defeats the whole purpose,” Nhau added.

A car hiring industry that had flourished as tourism boomed ahead of Covid-19 is among subsectors affected by the rebate regime, the Tourism Business Council boss disclosed.

He said instead of blanket bans, authorities should fish out bad apples behind the abuse and honour those playing by the book.

“Only (hiring companies) attached to hotels are benefiting. Understandably, there was an abuse of the facility at some point. But, instead of treating everyone or painting everyone with the same brush, the culprits, who were identified, are known. They must be suspended, and they must leave everyone else - not ban all car hire companies,” Nhau said.

He said every sub-sector of the tourism industry complements one another.

“You end up with a country with very beautiful hotels, beautiful restaurants, but no car hire companies,” Nhau said.

Ndhlovu revealed in September 2022 that close to 35 tourism industry firms had benefited from tax rebates.

“There are no other incentives. We have not been given any incentives apart from the duty to rebate,” Nhau said.

“We now need to have a conversation with authorities and come up with proper incentives that are acceptable, that are friendly to everybody, and accessible to everybody. That is the only time we can dream or talk of reviving the tourism industry.”

Tourism was the worst affected by Covid-19 the world over. Zimbabwe’s tourism sector was hit hard because of the long hard lockdowns.

“The only incentive that we had is the duty-free rebate for operators, who want to re-capitalise in terms of equipment. They are able to import capital goods and equipment duty free. This is where you have to sustain it,” he said.

Nhau said there was a need to refine the incentives so that they benefit all the operators in Zimbabwe.

Tourism contributes about 4,1% to the country’s gross domestic product.

It is billed to generate up to US$5 billion annually by 2025.

Average annual revenues have been around US$2 billion in the past decade.

Governments worldwide responded to the Covid-19 pandemic by rolling out lockdowns, which prevented travel between 2020 and 2021. The implications of the decisions hit tourism-dependent economies like Zimbabwe hard. Major tourist source markets, such as the United States, Britain, South Africa and China, were also under lockdowns.

A positive outlook in the sector is now being witnessed with tourists trooping back after recovery gathered pace ever since global markets relaxed travel restrictions over the past years in light of reduced infections.

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