HARARE: Zimbabwe is 30-40% more expensive in offering tourists packages and services, a study by the Zimbabwe Council for Tourism (ZCT) has shown. This comes as the tourism industry is smarting from a 15% value-added tax (VAT) imposed on international tourists’ accommodation bills beginning this year.
Speaking at a Press briefing in Harare yesterday, ZCT president Francis Ngwenya said VAT would derail government’s goal of a $5 billion tourism sector by 2020. “A study done before the weakening of the South African rand places us at 30% to 40% more expensive than other regional countries. It is more expensive to spend holidays in Zimbabwe,” Ngwenya said.
“Its (VAT) application serves to make Zimbabwe an expensive destination and has already had the effect of reducing tourist arrivals as travellers choose to travel to other, more competitive destinations in Africa or elsewhere in the world.”
He said while a number of establishments have tried to absorb the VAT within their cost structures, “this is proving problematic and is making their business unavailable”. The sector is lobbying to have government to remove the tax. The Parliamentary Sub-Committee on Tourism and Hospitality has recommended its scrapping.
Ngwenya said tourists should not be regarded as a source of never-ending income and “it must be remembered that Zimbabwe is a destination that competes with every single tourist destination in the world for the tourist dollar”. “We cannot simply increase rates for these travellers and expect them to continue coming,” Ngwenya said.
“It is quite clear to me that what is happening is that the local authorities, desperate to extend income generation in every direction, will literally kill the goose that lays the golden egg.”
Government introduced VAT in 2003, but the tourism sector was exempted from tax payments as it was duly recognised as an exporter and in 2014, there was a 3,1% growth of two million tourists.
Ngwenya said as the tourism sector worldwide prepares to commemorate World Tourism Day 2015 next month, Zimbabwe should complement that with a thrust towards a $5-billion economy laid out in the Tourism and Hospitality Master Plan.
“We must ensure the free flow of travellers both from within and without the country. We encourage the growth of domestic tourism through creating affordable packages across the country,” Ngwenya said.
“We must monitor the movement of regional currencies and its impact on travellers to our destination. Of particular note is the depreciation of the rand and pula against the US dollar.”
