THE government is considering scrapping the 15% value added tax (VAT) on accommodation and tourism services payments by foreign tourists which was supposed to be effected in March this year.
Southern Eye Business has it on good authority that tourism sector players are in talks with Finance and Economic Development minister Patrick Chinamasa who announced the pending levy on foreign tourists in his 2014 budget in December last year.
According to the recently-published Hansard — the Parliament official publication — Tourism and Hospitality minister Walter Mzembi said after receiving appeals from the tourism sector on the negative impact of the 15% VAT introduced in the budget, he was in discussion with Chinamasa.
“I received appeals from the sector that point to an otherwise negative impact on the performance of tourism should that policy measure proceed to implementation and have requested a central policy dialogue meeting between myself and the Finance and Economic Development minister, specifically to look at this issue of 15% tax on foreign arrivals,” said Mzembi.
Players in the tourism sector want the government to scrap the 15% VAT on payments for accommodation and tourism services by foreign visitors announced in the 2014 budget.
The industry players fear the introduction of the levy would hurt the tourism sector.
When the VAT system was introduced in 2003, the travel and tourism sector was recognised as an exporter, exempt from VAT on foreign visitors’ payments.
Its reintroduction is seen as retrogressive following gains made in the tourism sector since the formation of the coalition government in 2009.
The country’s tourism industry has been on a recovery path since dollarisation in 2009, a development that has seen the return of tourists from traditional markets such as the United Kingdom and the United States.
Zimbabwe recorded a 12% increase in tourist arrivals in the first half of the year to 859 995 compared to 767 393 registered in the same period the previous year.