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Minister Walter Mzembi

TOURISM and Hospitality Industry Minister Dr Walter Mzembi says he will engage the Ministry of Finance and Economic Development to negotiate for a downward review of the taxation system for the tourism sector.

He said he has received complaints from a number of tourism operators who have been receiving annual tax bills in excess of $4 million, which he said was “killing the sector.”

“If we do not conceive sound taxation policies for the sector we could tax the sector to death. I have been receiving complaints from operators in the sector, with some saying they have been receiving tax bills upwards of $4 million. We do not want to be that desperate.

“I am going to be meeting with the acting Minister of Finance (Walter Chidhakwa) to discuss this very issue,” he said.

Minister Mzembi was speaking on the sidelines of a presentation he made to the Zimbabwe National Defence College yesterday. In the 2015 National Budget Finance Minister Patrick Chinamasa proposed the introduction of a 15 percent value-added tax (VAT) on foreign tourists’ payments for accommodation and tourism-related services as a means to boost revenue inflows, with the tax coming into effect in January 2015.

But the tax has weighed heavily on local tourism operators. Minister Mzembi has said the tax was “unilaterally” implemented without an effective cost-benefit-and-opportunity- cost analysis being carried out.

He said the tourism sector is now arguably the second largest employer in the country — both directly and indirectly — after civil service and there was need to ensure that these jobs are protected. According to official stats from Treasury, the tourism sector is expected to lead economic growth in the 2015/2016 season by 4.1 percent ahead of traditional linchpin sectors such as agriculture, mining and manufacturing.

Meanwhile, Minister Mzembi has urged the Zimbabwe Tourism Authority and tour operators in the country to be aggressive and market regional tourism products as part of the local product in the context of the ‘regional integrated tourism products’ policy which the region is pushing for.

There have been complaints from some sections that South Africa, in particular, has been promoting the Victoria Falls as a South African tourism product and as such accruing revenues that should be benefiting Zimbabwe, and to some extent Zambia.

He said the Tourism Satellite Account, which Sadc is presently developing, will help to ensure that Zimbabwe gets its fair share of revenue from such a regional focus. Zimbabwe is part of a group of Southern African countries that are establishing the Tourism Satellite Account, a system that will more accurately measure tourism’s contribution to their economies. — BH24