from DANIEL JONES in Victoria Falls, Zimbabwe
VICTORIA FALLS, (CAJ News) – TOURISM and hospitality industry operators in Zimbabwe can now retain earnings obtained in foreign currency after the government authorized them to recapitalise.
This comes in the wake of COVID-19 effects, which left the tourism industry almost grounded.
In a monetary policy statement issued on Monday, Reserve Bank of Zimbabwe Governor, Dr John Mangudya, said registered tourism players shall retain 100 percent of their foreign currency earnings to allow the sector recapitalization.
“In order to respond to the adverse effects of CIVID-19 on the tourism sector, which was hard hit by the pandemic not only in Zimbabwe but the world over, with immediate effect, players in the tourism and hospitality industry shall retain 100 percent of their foreign currency earnings to allow them to quickly recapitalize and procure the necessary goods and services required by tourists and travelers,” said Mangudya.
Clement Mukwasi, Employers Association for the Tourism and Safari Operators, welcomed the decision.
He said this would bring relief to the industry whose revenue is already compromised.
Tourism was one of the hardest hit sectors by COVID-19.
International travel restrictions led to more than three-quarters of workers losing jobs.
Early last year, government removed Value Added Tax (VAT) payable on selected goods and services in the tourism sector in an effort to promote domestic tourism and catapult the industry back to its heyday.
The 12-month VAT reprieve is expected to end next month.
VAT was payable by tourists for accommodation and visitor services and was pegged at 14.5 percent after being reduced from 15 percent.
The selected goods and services include food and beverages served at place of accommodation, shuttle services, car rental services, marine and ferry services, sport fishing, safari operations, tourism and exploring national museums and monuments, recreational activities provided by companies registered with the Zimbabwe Tourism Authority (ZTA).
The tourism industry has also been calling for discount or zero rating on VAT to be able to operate arguing that the domestic market is different from the traditional international market.
Industry players have also appealed to government for a 50-percent slash on permits and licence fees.
Government also in 2020 set aside a $500 million Tourism Support Fund in guarantees for tourism sector players to access working capital in the form of loans from banks.
Of this, a total of $20 million was meant to provide seed capital to kick-start a Tourism Revolving Fund while VAT was waived.
Industry operators said the high licences and taxes made the destination expensive.
A two-year suspension of Customs and Excise duty payable on specified motor vehicles imported by safari operators ended in December last year.
– CAJ News