Tourism levy to be imposed this year
. . . tourism players unhappy, claim they were not consulted.
Government will this year introduce a new levy on tourism businesses.
The levy is provided for by the Tourism Levy Regulations, which were passed by the National Assembly in 2021.
The regulations seek to operationalise the Tourism (Amendment) Act of 2006, which provides for establishment of a Tourism Development Fund.
Operators of local tourism facilities will be levied by the Ministry of Tourism, Environment and Culture and the money will go into the Fund.
In turn, the Fund will be used for the promotion of the country as a destination of choice for local and international visitors. It will also be ploughed back into the tourism facilities for their care and maintenance.
In an interview, Lesotho Tourism Development Corporation (LTDC) CEO, Retšelisitsoe Nko, said preparations were afoot to implement the levy this year.
“We are working around the clock to implement the tourism levy this year, tentatively by 1 July 2022,” Dr Nko said.
“Through the levy, we will have sufficient income for institutional realignment and the implementation of strategic development goals of attracting more tourism, contributing to the country’s balance of payments as well as jobs creation in the tourism sector.”
Tourism is a multi-billion dollar global industry.
Although tourism is a multi-billion-dollar global industry, its current contribution to the fiscus is negligible. Former, Tourism principal secretary, Monaphathi Maraka, said this was unlikely to change for the better as long as government continued to pay lip service to the sector.
Prior to his redeployment to Lesotho’s embassy in Ethiopia in 2018, Mr Maraka had been one of the main proponents of the tourism levy, saying it the fund would be used for the promotion of the country as a destination of choice for local and international visitors.
“The Ministry of Tourism is among those four ministries which are supposed to be economic drivers under the second National Strategic Development Plan (NSDPII) but presently there is a very low demand for tourism products,” Mr Maraka said.
“The demand is very low because we do not adequately market tourism and its products and so the facilities are lying idle.
“Part of the reason is that there is low investment in tourism. In Sesotho, we say, “mabele a lengoa ka amang” (to make money you must invest money). To address this, we are pursuing the introduction of a tourism levy which will be paid by operators of tourism facilities.
“The revenue will not go into the government coffers but come straight into the ministerial budget,” Mr Maraka said at the time.
In the recent interview, Dr Nko echoed similar sentiments, saying the introduction of the levy would help promote the tourism sector in line with its envisaged status as one of the economic drivers under the government’s second National Strategic Development Plan (NSDPII).
“I’m envisaging a positive future ahead. I look forward to the Finance Minister (Thabo Sophonea) presenting his budget speech next year and saying at least M20 million has been generated from the tourism sector.
“Our Botswana counterparts are reported to have raised over P50 billion from the levy. Imagine how much we can raise since we have more tourism attractions than them,” Dr Nko said.
However, in a separate interview, Lesotho Hotels and Hospitality Association (LHHA) chairperson, Tsunyane Tsotetsi, dismissed the levy as just another money-making scheme by the government which did not take into consideration the interests of players on the sector.
“We were not consulted on the levy. The government is doing everything in its power to generate more revenue at all costs without the necessary dialogue with stakeholders who will be affected by the move,” Mr Tsotetsi said.