The tourism industry, recovering from the effects of COVID-19, has for the past decade enjoyed a rebate of duty on capital equipment, which has enabled operators to revamp their facilities and acquire modern equipment to match global standards.
Since 2016, tourism operators imported equipment in millions of dollars with the Treasury foregoing substantial amounts of revenue.
Finance and Economic Development Minister Mthuli Ncube said the Government was expecting the incentive, apart from allowing operators to upgrade their facilities, would also benefit consumers through “responsible and affordable pricing.”
“I, therefore, propose to replace the facility with the suspension of duty on specified capital equipment imported by approved tourism operators, with effect from 1 January 2023,” he said.
“Furthermore, for ease of administration, I propose that the minimum value of capital equipment to be imported under suspension of duty be pegged at US$25 000, with effect from 1 January 2023,” Minister Ncube said when he presented the 2023 National Budget.
Tourism players have, however, rebuked Government’s decision saying for the sector most affected by the global pandemic, more incentives were critical for recovery.
“By making the adjustments to the facility is retrogressive,” Zimbabwe Safari Operators Association chairman Emmanuel Fundira said.
“The industry is still recovering from the effects of the Covid-19 pandemic and taking away incentives, which have become a global phenomenon, will not help the sector,” added Dr Fundira.
Some tourism operators said by pegging the minimum value of goods that can be excepted from import duty at US$25 000, the government “is closing the door for small operators.”
During the first half of 2022, the country recorded a 115 percent rise in tourist arrivals to 352 719, compared with the same period in 2021. Domestic visits to the national parks rose by 90 percent from 90 909 in 2021, to 172,481 during the period from January to May 2022. As a result, tourism receipts increased by 121 percent in 2022 to US$337,5 million, compared to the same period last year.
The tourism industry is expected to continue to grow in the outlook, benefiting from the recovery in international tourism, the coming in of new players in the aviation sector and meetings, incentives, conferences and exhibitions (MICE), says the Treasury.