ZIMBABWE’S tourism industry
players fear the government
will alienate SA travellers
if it goes ahead with its
proposal to extend 15% VAT on
payments for accommodation
and tourism services by
foreign visitors. Finance
minister, Patrick Chinamasa,
proposed it in his 2014 budget
presentation last December.
Ross Kennedy, ceo of Africa
Albida Tourism, says: “It is an
effective 15% increase in room
rates and other elements of a
tourism package for all foreign
tourists. Some of the markets
that support Zimbabwe are
very price sensitive and seek
budget holidays. An additional
15% will reduce their appetite
and desire to visit Zimbabwe.”
Ross says the SA market
in particular will be heavily
affected by the new proposal
because of the current weak
rand. He foresees a massive
decline in arrivals if the
proposal gets the go-ahead.
Francis Ngwenya, Zimbabwe
Council for Tourism president,
agrees and says the increase
will signicantly reduce the
arrivals from South Africa
– a key source market – as
Zimbabwe is already seen as
very expensive.
Francis explained in a letter
to the Minister of Tourism,
Walter Mzembi, that the
Zimbabwe industry was still
very fragile and needed a
minimum of ve years to
recover. “While the industry is
enjoying encouraging growth,
that growth is certainly not
yet stellar. There is a long way
to go to get to a point where
there is pressure on room
stock, which then allows for
prices to move up. While at
the current low occupancies,
the trade in source markets
will only accept small
incremental price increases
based on ination, usually
in the key source markets/
currencies.”
Emmanuel Fundira, group ce
at Astoc Leisure Group, says
15% VAT will be a disaster for
the entire tourism industry.
He says the industry works
two years in advance and it is
impossible to pass on a tax
such as this, as contracts for
2014 were signed in February
and March 2013.
The only positive
development, Emmanuel
says, is that the lines of
communication between the
industry and the government
are now open. He says
the Finance Minister had
announced that the new
VAT proposal would be
implemented from January
1 but this didn’t materialise,
thanks to objections from
the industry. However,
Emmanuel says that, despite
elaborate discussions with
the government, he doesn’t
foresee a total reprieve of
VAT this year, and the industry
should brace itself for some
new tax increases.
