Leonard Ncube, Victoria Falls Reporter
GOVERNMENT’S $500 million Tourism Support Fund and waiver of Value Added Tax (VAT) payable by tourists for accommodation, has brought hope to the tourism sector, which has been hard hit by the outbreak of Covid-19 pandemic.

The support is part of the $18 billion Economic Recovery and Stimulus Package unveiled by President Mnangagwa aimed at reinvigorating the economy and providing relief to individuals, families, small businesses and industries impacted by the economic slowdown as a result of the Covid-19 pandemic.

The stimulus package is aimed at providing liquidity and support to all productive sectors of the economy such as tourism, mining, manufacturing and agriculture.

The tourism sector is one of the hardest hit sectors as a result of international travel restrictions. More than three-quarters of jobs in the sector have been lost while tour operators and hoteliers closed indefinitely owing to lack of business.

The sector depended on international tourists and probably there is a need now to promote domestic tourism.

Government has set aside $500 million in guarantees for tourism sector players to access working capital in the form of loans from banks. A total of $20 million will provide seed capital to kickstart a Tourism

Revolving Fund while VAT payable by domestic tourists for accommodation and visitor services has been waived.

VAT was pegged at 14,5 percent after being reduced from 15 percent in the current national budget. Finance and Economic Development Minister, Professor Mthuli Ncube, has said the stimulus package will provide recovery mechanism for the tourism sector as well as protect employment and prevent layoffs as result of the impact of Covid-19.

“In order to promote domestic tourism, a waiver of VAT payable by domestic tourists for accommodation and visitor services has been granted. Domestic tourism will be the first to recover in the wake of global restrictions,” said Prof Ncube in a statement on Monday.

Minister Ncube said there will also be deferrement of liquidation of foreign currency paid by international clients whose travel plans were interrupted by the global lockdown.

“These funds should be rolled over so that these visitors can come back to Zimbabwe when the restrictions are lifted. Government will request contributions from international partners such as The World Bank, which have already indicated keeness to contribute,” Prof Ncube said.

He said budgetary support will also be given to the Zimbabwe Tourism Authority (ZTA), which has lost its main revenue source, the tourism levy.

The Minister said Government will also settle all long overdue bills with tourism sector players for services already rendered and that should unlock working capital resources.

Hospitality Association of Zimbabwe (HAZ) Victoria Falls chapter chairman Mr Anald Musonza said the stimulus package and VAT waiver were a welcome relief for the industry. He said most players had been forced to effect 50 percent salary cut because of lack of revenue.

“This is a welcome development and we hope it will assist us to come up with rates that stimulate domestic tourism and improve cashflows for distressed companies,” he said.

Mr Musonza said most companies paid workers 50 percent of their salaries for March and April and many did not know how they were going to raise salaries for May. At most premises, skeleton staff made up of accounts and grounds maintenance employees are working while the rest have been sent home. — @ncubeleon