The tourism industry has for years been seen as a low hanging fruit with potential to contribute significantly to the country’s economic turnaround.
It is one of the sectors that has been identified under Zim-Asset, as key to achieving growth and creating employment. The establishment of new routes by regional and continental airlines into Victoria Falls has boosted this view.
The tourism sector is already talking of the need to expand capacity to cater for the increased numbers flying into the resort town. It is, therefore, critical that the sector gets maximum support from all stakeholders, particularly Government.
It is decisions such as that taken by Finance and Economic Development Minister Patrick Chinamasa to waive the backdated Value Added Tax (VAT) accruing on food and beverages offered by the tourism industry as part of packaged accommodation that will help the revival of the industry.
The move defused a potentially disruptive situation in the tourism industry.
The fact that hoteliers, especially those operating in Victoria Falls, had been slapped with a combined $5,3 million bill in unpaid taxes by the Zimbabwe Revenue Authority (Zimra) was just not proper.
We wondered how The Victoria Safari Lodge, which was handed a $1,26 million bill and the Victoria Falls Hotel that had arrears of $4,1 million were going to pay off those amounts.
Payment of such huge amounts could have come with ghastly consequences, which could have seen such establishments going out of business.
While we are all for paying taxes, which are critical in keeping the wheels of Government and indeed the nation in motion, we believe that Zimra as the collector of revenue reneged on its duties.
The hoteliers are claiming that they were not charging the VAT based in part on the “informal and non-binding advice from Zimra, which did not conform to the procedures stipulated in the Revenue Authority Act”.
If this turns out to be true, then Zimra has to take a portion of the blame. A lot of questions beg for answers. Why did Zimra wait for years to claim taxes that should have been collected between 2009 and 2015?
Why was the revenue authority not constantly reminding the hoteliers of their obligations during this period?
A stitch in time saves nine.
We believe Zimra should have been more proactive in ensuring that hoteliers factored in the VAT in their pricing when the tax became effective.
While the waiver will probably put a dent in Zimra’s revenue collection due to the millions that it will be foregoing, we commend Minister Chinamasa for looking at the bigger picture and taking such a bold move.
We also applaud Tourism and Hospitality Industry Minister Dr Walter Mzembi and the Zimbabwe Council for Tourism for arguing that compelling hoteliers to pay the bills would cripple their operations.
Destinations in Zimbabwe are already viewed as costly.
This was set to worsen because the hoteliers were simply going to push the costs to their customers.
We do appreciate that tourism, like any other sector in the country, should do its bit to contribute to revenue critical to run the country.
But this has to be done in a systematic, sustainable and rational way.
We do not expect Government to contribute to killing the goose that lays the golden egg.