KZN plan to tax tourists

2014-08-16 00:00

PLANS by the KwaZulu-Natal Department of Economic Development, Tourism and Environmental Affairs to introduce a 10% hospitality levy were greeted with surprise yesterday.

MEC Michael Mabuyakhulu said in his budget speech they would introduce a 10% hospitality levy from April 1, 2015.

The business sector has complained vehemently about the growing number of levies and administrative cost increases being imposed on it by government.

“We will engage tourism think tanks and all industry players before the end of September,” said Mabuyakhulu.

When pressed for further details, department spokesperson Bheko Madlala said the exact parameters of the levy would be discussed with the industry, but an example would be 10% of the room rate and food bills of foreign tourists.

The aim, according to the department, would be to create “a war chest to attract major events to the province of KwaZulu-Natal”.

Similar “business events bid and support funds” already exist in cities such as Glasgow, Vienna, Sydney, Barcelona, Singapore and Toronto.

Federated Hospitality Association of South Africa head, KwaZulu-Natal’s Charles Preece, said he could not comment as it was the first time he had heard about it. It needed to be discussed between the province and the industry, he said.

Durban Chamber of Commerce and Industry chief executive officer Andrew Layman said whether a 10% tax on the whole hospitality sector was the best way of securing a greater private sector contribution remained to be seen.

“We have not been consulted on this yet. There is always a problem with taxes that are seldom ring-fenced for particular purposes and often disappear into the bottomless pit of public finance.”

Layman said the chamber would discuss the matter with members and then comment about its acceptability to the industry.

Weekend Witness understands that KZN’s hospitality chiefs are already upset about levies they pay to national tourism marketing agency Satour, as the marketing it did, did not feature enough of KwaZulu-Natal.

Mabuyakhulu said business events or meetings, exhibitions, congresses and major leisure events are one of the most powerful modern means to bring about social and economic development.

He said a business events bid and support fund could support the KwaZulu-Natal Convention Bureau and other role-players, including government departments, who go out to canvass for and attract these events. In addition, support funding was required for activities such as delegate boosting and other forms of promotion to ensure the success of the secured event.

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