VAT exemption for domestic tourism
THE tourism industry will enjoy Value Added Tax (VAT) exemption on products offered to locals as part of measures to nurse the sector back to health after over two months of Covid-19-induced closure.
Environment, Climate, Tourism and Hospitality Industry Minister Mangaliso Ndlovu said the facility ensures a smooth “comeback” for the tourism sector.
The Government is finalising a $500 million kitty for the sector.
“We are hoping to start opening tourism to the local people first. Tourism is a very sensitive sector, so we have put in place strict health guidelines,” he said.
“The health guidelines vary from frequent to thorough sanitisation and fumigation of the facilities.
“We are also talking about social distancing, even, in terms of accommodation and in restaurants.
“For example, there will be a space of two or three vacant rooms between guests at hotels. This will mean, in terms of capacity, there will be a reduction.
“However, we are going to waiver Value Added Tax on domestic tourism to make services affordable to locals.”
Added Minister Ndlovu: “Government will also pay all its debts to various tourism and hospitality facilities.
“We are now finalising the modalities of the $500 million tourism facility which will be disbursed to the sector.”
Government is optimistic the sector could hinge on domestic tourism for survival.
Tourism players project the industry will lose between US$500 million and US$1 billion in potential revenue this year due to the coronavirus pandemic.
The country had anticipated US$1,4 billion in receipts from tourism this year.
But as a result of Covid-19, an 85 percent fall in international visitors is now forecast.
Zambia recently opened its tourism industry despite battling to arrest the spread of coronavirus.
Globally, the tourism industry has been the hardest hit as most countries are on lockdown.
Borders remain shut, while travel has been restricted.