ZAMBIA: TOURISM FISCAL RELIEF EXTENDED FOR ANOTHER YEAR
In the 2021 Budget, Government reduced the CIT rate on income earned by hotels and lodges on accommodation and food coaches, to 15% from 35%. The Government has extended the reduced CIT to the 2022 fiscal year.
Other retained and new COVID-19 relief measures include the:
- suspension of registration fees for hotel managers;
- suspension of licence renewal fees paid by hotels and lodges;
- retention of fees paid by tourism enterprises;
- suspension of the15% customs duty on tourist buses and coaches (double-decker) and safari game viewing vehicles; and
- reduction of visa fees of all categories by 50%.
These measures are aimed at putting the sector on a course to recovery and to market the country as a favourable tourist destination.
To promote the growth of tourism, the Government has outlined plans to develop other parts of the country by establishing the necessary infrastructure and regulatory framework that will make them attractive for the private sector to establish hotels, lodges and other tourism facilities.
On the revenue side, these measures are expected to result in the revenue loss of around ZMW 2.9 million. However, this is significantly lower than the estimated USD 400 million lost because of the negative impact of the pandemic on the country’s travel and tourism industry and its entire value chain.
Government has indicated that in addition to the relief measures introduced, it will also reduce the number of licences required to operate in the sector to reduce the cost of doing business in the sector and to promote investment.