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Tourism VAT hurts Meikles hospitality arm

Diversified group Meikles Limited says a new value added tax on foreign visitors has seen the group’s premier Victoria Falls Hotel recording a 16% drop in revenue for the first five months to August compared to prior comparative period.

Staff Reporter

Meikles chairman John Moxon told an annual general meeting that while the group’s hospitality arm registered a modest growth in occupancy, revenue at Victoria Falls Hotel, one of the country’s prime hotels, had dipped.

Last year Finance Minister Patrick Chinamasa introduced value-added tax (VAT) on foreign tourists’ payments for accommodation and tourism-related services, as government moved in to create more fiscal space. The tax came into effect in January 2015.

Tourism minister Walter Mzembi, whom early this year criticized treasury for introducing the new tax without consultation appears to have failed to convince Chinamasa to scrap the tax despite increasing calls by the industry to review the new tax regime.

Zimbabwe’s tourist arrivals increased by 2,6 percent to 1,880,028 in 2014 from 1,832,583 recorded the previous year, but the figure was still below the overall regional growth rate.

The country recorded a marginal three percent decline in total annual earnings to $827 million from $856 million in 2013.

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