Authorities in Zimbabwe have waived Value Added Tax (VAT) on domestic tourism to make services affordable to locals.
This, they hope will stimulate domestic tourism and anchor recovery of the broader tourism and hospitality industry, which is reeling from the effects of Covid-19.
Tourism and Hospitality Industry Minister Mangaliso Ndlovu announced the waiver on Thursday.
“Government has approved a waiver of Value Added Tax payable by domestic tourists for accommodation and other services. This is envisaged to significantly lower the costs of accessing tourism facilities by locals,” he said.
The minister added, “It is my view that our revival will be anchored on domestic tourism and focus has to be on driving demand for our facilities.”
The industry is projected to lose between USD $500 million and USD $1 billion in potential revenue this year due to the pandemic.
Zimbabwe had projected revenue of USD $1,4 billion before Covid-19 struck.
Government estimates that arrivals will fall by 85 percent, at the worst, if the virus does not recede soon enough.
A ZW $500 million bank guaranteed stimulus package has since been availed to cushion the sector.
Government has also set up a tourism revolving fund and injected an initial ZW $20 million into the fund.