ZIMBABWE: Heavy Taxation Chokes Tourism

Presenting to the Zimbabwe National Defence College on Monday, Tourism and Hospitality Industry minister Walter Mzembi said he had received complaints from a number of tourism operators, who had been receiving tax bills of more than $4 million annually.

“I am going to be meeting with the acting Finance minister Walter Chidhakwa today to discuss this very issue. This is killing the sector. If we don’t conceive sound taxation policies for the sector, we could tax the sector to death … we don’t want to be that desperate,” he said.

“The tax is just implemented without an effective cost-benefit and opportunity-cost assessment.”

The sector has been battling for the scrapping of the 15% value added tax on accommodation for foreigners, which has made Zimbabwe an expensive destination.

Mzembi said the tourism sector was currently the second largest employer in the country, directly and indirectly, after the civil service and there was need to ensure that these jobs were protected.

He urged the Zimbabwe Tourism Authority and other operators to be aggressive in marketing the country.

“The Zimbabwe Tourism Authority and other tour operators in the country need to be aggressive and market regional tourism products as part of the local product in the context of the ‘regional integrated tourism products’ policy,” Mzembi said.

South Africa has been promoting Victoria Falls as their tourism product and in the process, generates revenue that should have benefited Zimbabwe.

Tourism has the quickest turnaround ahead of other sectors such as mining and manufacturing.

In the first quarter of the year, tourist arrivals grew by 16% to 450 572, spurred by the growth in arrivals from all the source markets except Oceania. In the same period in 2015, arrivals were 387 557.

The government is implementing the National Tourism Policy of 2014 to ensure the country fully exploits its natural resources and tourism sites for the benefit of the economy.

Under the 5:5:15:2020 model, Zimbabwe aims to have five million arrivals, generate $5 billion from tourism and the sector contributing 15% to the gross domestic product by 2020.