Zimpapers Logo

Clement Mukwasi Victoria Falls Correspondent
TOURISM Minister Engineer Walter Mzembi yesterday blasted the Zimbabwe Revenue Authority (Zimra) for allegedly attempting to introduce Value Added Tax (VAT) on foreign tourists through a back door contrary to the provisions of the national budget.

The Minister was incensed after Zimra wrote a letter to African Sun referenced DT156/14 and signed by TG Chiradza demanding that VAT be collected from foreign tourists with effect from January 2015.

Writing on social media platform WhatsApp, the Minister gave a distinction between intelligent taxation and uninformed taxation that “kills the goose that lays the golden egg.”

“The easiest thing to do in life is to tax tourism. Even our ancestors had a passage fee for traffic transiting through their territory hence the term Intelligent Taxation where you encourage recovery and growth first and tax volume.

“Unintelligent Taxation is tax on entry which then constitutes a barrier to entry or where you apply illogical “shock” taxation which kills the business ultimately. In the absence of proper cost-benefit analysis as feedback to industry which we’ve been waiting for since our April meeting with the Minister of Finance, it becomes dictatorial to proceed with this Statutory Instrument on VAT on foreign accommodation,” he said.

The Minister further lambasted the parastatal for attempting to run the ministers instead of giving them feedback that informs good policy decisions. “The market is sensitive and has choices on where to go. If we assign bureaucrats, as we jointly did in April, they shouldn’t run us, but should provide feedback and then we make proper policy decisions. The fact that the Minister of Finance omitted it (VAT) in his policy statement is acknowledgement of further due diligence on the matter.

“To then get this unilateral shooting from the hip from officials is undermining our executive authority,” said Minister Mzembi.

Tour operators are equally riled by the development as many of them went into overdrive praising the Minister of Finance for not introducing VAT on foreign tourists only to be shocked when Zimra then wrote directing that the tax be effected in January.

The Hospitality Association of Zimbabwe (HAZ) has described the scuttling move as confusing and retrogressive.

“We no longer know what the official position is since the budget did not provide for VAT and that no Statutory Instrument has been promulgated in that regard to our knowledge.

“There’s now serious confusion in the market and our international travel agents are the most hit. If the correct position is not communicated, that may have disastrous effects in our industry,” said Jonathan Hudson who is the HAZ representative in Victoria Falls.