The Sunday News
Roberta Katunga, Senior Business Reporter
TOURISM and Hospitality Industry Minister Dr Walter Mzembi has called for the creation of new areas of taxation that do not involve levying inbound tourists in the tourism sector.
Addressing delegates at the inaugural Zimbabwe Council for Tourism convention in Victoria Falls on Thursday, Dr Mzembi said measured tax was required for the sector and urged responsible authorities to desist from taxing visitors “to death” as this would affect arrivals into the country.
“When it comes to the tourism sector, it is important to think outside the box. We need to come up with creative areas for taxation that deal with outbound and transit travel instead of inbound tourists who are spending their money here. There is no need to tax the tourism sector to death,” said Dr Mzembi.
Dr Mzembi said presumptive taxes could be created to close the gap in the fiscus and said taxing inbound visitors was detrimental to the sector. He said tax authorities should focus on the people who do not bring cash inflows into the country through different segments like travel health insurance and focus on making more money there.
At the beginning of last year, Finance Minister Patrick Chinamasa introduced a 15 percent value added tax on foreign tourists’ payments for accommodation and tourism related services which were previously exempted, a move players claimed led to declining business as it made the destination more expensive and uncompetitive.
Meanwhile, Minister Mzembi revealed that he was set to discuss indigenisation and investment policy issues on the tourism sector with his counterpart Minister Patrick Zhuwao. He said this while responding to questions and concerns from delegates on the indigenisation of the tourism sector. The delegates said there was a lot of interest from investors eyeing the tourism sector but needed clear guidelines.
“I am meeting with the minister (Zhuwao) soon to appraise him on the tourism sector with regards to how it functions and issues to do with return on investment. I will bring him up to speed and what to expect to drive investment into the sector,” said Dr Mzembi.
Dr Mzembi said it was imperative to note that Zimbabwe was competing for investors with other countries which also have an element of indigenisation.
“The issue is not the law but how you package it. We must advance to a stage where the Zimbabwe Investment Authority handles investment issues so that the law does not get misinterpreted and we have to work harder to be competitive,” he said.
He said the uniqueness of the sector could not be ignored and some issues need to be adjusted to align with the needs of the tourism industry. Tourism is one of Zimbabwe’s main foreign currency earners, generating $827 million in 2014.
Zimbabwe’s tourist arrivals increased by 2,6 percent to 1 880 028 in 2014 from 1 832 583 recorded the previous year, but the figure was still below the overall regional growth of seven percent. Figures for 2015 are still being compiled, according to the Zimbabwe Tourism Authority.
