Zimbabwe has collected up to $1,6 million in taxes levied on non-resident tourists in the four months to April, despite industry protests that the levy has made the country an expensive destination and is slowing the sector’s recovery, the Treasury told Parliament on Monday.
Finance Minister Patrick Chinamasa announced the 15 percent value-added tax (VAT) on foreign tourists’ payments for accommodation and tourism-related services in his 2015 budget last November, as the cash-strapped government scrambled to raise revenue. The tax came into effect in January this year.
The levy has however been largely contested, with the tourism minister Walter Mzembi and industry players lobbying for its removal.
Finance secretary Willard Manungo told a parliamentary committee on tourism that the levy charge was consistent with developments in the region and had raised $1,6 million between January and April.
“Tanzania is on the upper end, applying 18 percent while Seychelles and Mauritius both charge 15 percent,” said Manungo.
“South Africa charges 14 percent while Botswana charges 12 percent. Zambia is the only country in the region which does not have the levy in place.”
Tourism is one of Zimbabwe’s main foreign currency earners, generating $827 million in 2014, down from $856 million in 2013. 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.