The Zimbabwe Tourism Authority (ZTA) has called on the government to lower taxes levied on non-resident tourists’ accommodation to 10 percent or less to allow the industry to recover.
Zimbabwe’s cash-strapped government last year unilaterally imposed a 15 percent Value Added Tax (VAT) on foreign tourists’ accommodation to enhance its depleting coffers. ZTA chief executive officer Karikoga Kaseke said that industry understood that government was unlikely to abolish the tax and were now advocating for its reduction.
“I think from the look of things, the industry must accept that it has happened and there is no way the government can reverse that decision. The government (is) already taking the VAT. How can they reverse that decision?” Kaseke queried.
Last year, finance minister Patrick Chinamasa told Parliament that Treasury had collected $1,6 million under the levy in the four months to April, despite industry protests that the levy has made the country an expensive destination and is slowing the sector’s recovery.
Kaseke said this made it difficult for government to stop collecting the VAT.
“From my own point of view, I have never seen the government reverse such a decision. We campaigned against the introduction of the tax and expounded on the likely consequences for industry but the ministry of finance decided to introduce the VAT despite all that so we cannot be able to reverse it. I don’t think that will happen, it can only reduce it and we are asking (the government) to do that,” said Kaseke.
“We want them to reduce it to at least 10 percent or less that 10 percent.”- The Source