Poor utilisation of tourism tax relief worries Govt

GOVERNMENT is concerned with the low uptake of the tax incentive provided under the Instrument (SI) number 102 of 2022 which exempts tourism enterprises from paying customs duty.

The incentive, which came into effect on January 1, 2024 and ending on December 31, 2025, has only benefitted 44 importations from 20 enterprises as at end of December 2023.

This prompted the Zambia Revenue Authority (ZRA) and the Ministry of Tourism to call for a stakeholder engagement on the utilisation of the SI on Tuesday in Lusaka.

During the meeting, ZRA Commissioner-General, Dingani Banda, regretted the low uptake of the incentive by a few tourism enterprises have benefitted from it.

Mr Banda was, however, hopeful that the engagement would open up more avenues for information sharing.

He said this in a speech by ZRA acting Commissioner - Business

Facilitation, Richard Kapasa.

“Government has come up with various tax incentives to help promote growth of various sectors in our economy. One such incentive is the tax incentive for the tourism sector which was introduced through SI number 102 of 2022.

“The low uptake of the incentive has resulted in both ZRA and the Ministry of Tourism embarking on massive campaign to raise awareness of this vital tax relief which is there for you to access and benefit from,” Mr Banda said.

At the same event, Tourism Permanent Secretary, Evans Muhanga, recognised the potential of tourism as a driver of economic development, saying it was the reason Government was implementing various measures to support and provide incentives for business operating within this sector.

Mr Muhunga cited the exemption of customs duty for qualifying enterprises as among policies aimed at reducing the financial burden on businesses and encouraging investment in tourism related activities.

He said this in a speech read by the Director Planning and Information, Mr Charles Mwenshi.

“Sadly, in spite of the availability of these incentives, I am aware that many stakeholders face challenges in accessing and maximising their benefits,” Mr Muhanga said.

Meanwhile, ZRA Assistant Commissioner-Credibility and Controls, Rex Mbilish, guided the tourism enterprise on how they could access the incentive. He said the incentive was only applicable to customs duty.

He pointed out that an enterprise would not be eligible for this incentive if they were not upto-date with all their tax types.

“Many enterprises are found to be non-compliant with different tax types under domestic taxes, leading to delays in customs clearance process. So, if this happens, then the exemption will elude you,” he said.