As of early 2014, all tourism packages and activities in Zambia now incur an expense of an additional 16% allocated to VAT, where previously VAT on tourism in the country was 0%. This will not apply to any bookings that were made back in 2013. This follows on from Kenya’s introduction of a 16% VAT tax on tourism in 2013.
The new tax will apply to bookings for safaris and game viewing (including unique Zambia offerings such as walking with lions), canoeing, helicopter tours, boat cruising and so on.
Not surprisingly the new tax laws have been met with considerable opposition by both tour operators and tourists, with many voicing concerns that it is hampering both local and inbound markets and making it harder for tour operators to make a profit. Grant Cummings, Owner of Chiawa Camp in the Lower Zambezi has said that he has received only negative feedback after the tax was implemented on January 1. “Zambia’s loss will be someone else’s gain,” he said.
There have already been a number of campaigns and petitions presented to government with the hope of reversing the new tax, but thus far these have borne no fruit. Some in the tourism industry have voiced hope that once the government sees the alleged negative effects of the tax on tourism, they will reverse the law, as they did with a previous law that hiked tourist visa fees up to $150.
However, other pundits have reasoned that the tax on tourism, one of Zambia’s most burgeoning industries, will have important and more wide-reaching effects on the country’s development, and that tour operators are thinking about their own pockets and failing to see the bigger picture.
Either way, even with the new 16% VAT charges, Zambia remains, on average, cheaper for tourists than either Kenya or Botswana, whilst simultaneously being less populated by tourists and more exclusive for the most part.
So bearing in mind the comparison of Zambian prices to other regional competitors and all that Zambia has to offer, is this new tax really likely to have a strongly negative effect on Zambian tourism?
We would love to know what you think!
Zambia is an expensive destination as it is. Internal flights alone can make getting to lodges and camps quite expensive. With many camps concerned about bookings a 16% increase across the board can’t be helping.
Of course safari operators are going to look at their bottom line – they are running a business after all. Having said that most operators do give back to the community through employment, purchasing local produce, community projects let alone all the taxes and fees they already pay.
It will be interesting to see the effect of this and whether the VAT earned outweighs losses incurred in other areas.
Zambia is still a fledgling tourist market and by implementing a similar % increase say as sophisticated tourist markets such as Tanzania, Botswana and Kenya not to mention South Africa they are loosing a competitive edge they may have.Why not stagger the increase either by selective tourist spots and their amenities ie The Victoria falls and other flegling areas and amenities which you want to develope more.and you have so much!I am sure you have an analysis of where your tourists come from and the currencies and the amount they spend. I would link the surcharge to the strongest currency as they are the ones who are already enjoying a cheap holidaySouth Africans must be a good potential market, but Zambia is still an expensive venue to get to. I would like to see marketing to be more wide spread (dstv) a great medium. And I am sure Zambia will attrack many more tourists. Once developed then impose a levy but not before except for the Victoria falls.etcGood luck but don’ kill the golden goose which lays the eggs
The tax is not a wise step, it will divert tourists to cheaper destinations.