Govt reviews tourism imports exemptions

HARARE - Government is reviewing statutory instruments exempting tourism-related imports from paying customs duty.

Tourism minister Walter Mzembi said the intention was to include other goods imported by tourism players in the duty exemption bracket.

He said the review would see the inclusion of other related and non-related tourism goods despite statutory Instrument 172 and 173 of 2013 specifically governing the importation of tourism-related goods from paying customs duty.

“We directed the officials to work further in expanding the basket of capital goods that are eligible for duty exemption and rebates,” Mzembi said.

He said the first issue is to “smooth implementation and operation of Statutory Instrument 172 and 173 that relates to duty free importation of capital goods and motor vehicles”.

Mzembi said there was need to expand the duty free basket to other sectors “that may not ordinarily look like tourism from a finance officer’s view”.

He said there was positive feedback from Finance minister Patrick Chinamasa and they were making headway to ensure more goods were accommodated as part of efforts to support the tourism sector.

This comes as the Tourism minister has also engaged the Finance ministry to do a cost benefit analysis of the recently imposed value added tax (VAT) on foreign tourists’ receipts.

The 15 percent tax was announced in the 2014 national budget.

Hoteliers and other tourism industry players have argued that Zimbabwe will become uncompetitive as a destination, warning that recent improvements in tourist arrivals may be reversed.

Finance minister Patrick Chinamasa said the VAT would be charged on accommodation and services rendered to foreign tourists.

There were strong indications that Treasury would not scrap the tax, but have been urged by tourism sector players to restructure how it was going to be implemented.

“What would it result in terms of earnings for the fiscus compared to bookings cancellations? Whichever is the less infelicitous or dangerous is what we go for,” Mzembi said.

“The tourism sector all over the world has this kind of tax on arrivals.. but it is the adhoc and abrupt manner in which the budget was seeking to impose it that would have rendered the bottom line of our industry inviable because it was coming like a shock sort of introduction of a tax,” he said.

He added that it would have been prudent for the introduction of the tax to be spread over a period in order to create a “win-win situation”.

“It cannot be imposed immediately on business that has been secured because it would result in bookings cancellations,” he said.

He said there are bookings made in advance.

Zimbabwe has not been charging VAT on foreign tourists’ payments for accommodation and tourism-related services.

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