Zimbabwe retains waiver on tourism taxes

Zimbabwe Revenue Authority (ZIMRA)

from DANIEL JONES in Victoria Falls, Zimbabwe
VICTORIA FALLS, (CAJ News) ZIMBABWE has withheld a suspension on Value Added Tax (VAT) payable on selected goods and services in the tourism sector.

This is part of government efforts to promote domestic tourism and revive the sector.

Tourism Minister, Nqobizitha Ndlovu, confirmed the development in the resort city of Victoria Falls.

“We as a government will continue with our VAT waiver system and I have agreed with the Minister of Finance (Prof Mthuli Ncube). He says for the foreseeable future that will be there even up to 2023 and if the need is still there, it might go beyond that,” Ndlovu said.

Before COVID-19, tourism operators and hoteliers in Zimbabwe paid 14,5 percent to the government on accommodation and visitor services rendered to clients.

This was waived through Statutory Instrument 87 of 2021 gazetted by Ncube as part of measures to facilitate vibrant domestic tourism.

The VAT reprieve was initially meant to be in place for 12 months ending next month.

Stakeholders in the tourism industry wanted a discount or zero rating on VAT to be able to operate, arguing that the domestic market was different from the traditional international market.

The reprieve was part of the $500 million Tourism Support Fund introduced by the Treasury last year to guarantee tourism players’ access to loans from banks.

This was part of an $18 billion Economic Recovery and Stimulus Package availed by the government across all industries.

Of this package, $20 million was meant to provide seed capital to kick-start a Tourism Revolving Fund.

These funds remain elusive to the sector hence the need to support operators.

Ndlovu said waivering VAT shows government commitment to partner the tourism sector through the journey of recovery.

He pleaded with the industry players to also offer competitive rates to clients so as to attract tourists.

Victoria Falls is generally regarded as expensive because of rates charged by operators for accommodation, activities and transport among other services.

Ndlovu encoutraged operators to offer discounts as cost is a key determinant of competitiveness.

He said relaxation of lockdown restrictions showed the tourism sector is on its way to recovery.

As at 12 September, Zimbabwe had recorded 126 269 cumulative confirmed cases and 4 538 deaths.

The first case in the country was recorded in Victoria Falls on March 20 last year.

– CAJ News

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