The government of Zambia has agreed to suspend Value Addition Tax (VAT) for hotels for at least two years in an effort to revive the industry hardly hit by Covid-19.
The announcement was made by the Minister of Tourism and Arts Ronald Chitotela during a parliamentary session on the country 2021 budget.
The tax relief follows the announcement made in September 2020 by the Minister of Finance Bwalya Ng’andu during his 2021 budget address to the national assembly.
In his speech, he informed that to revive the tourism sector, heavily affected by the Covid-19 pandemic, the government would announce additional relief measures.
In line with the Zambia Seventh National Development Plan (7NDP), the tourism sector is one of the drivers intended to create a diversified and resilient economy for sustained growth and socio-economic transformation.
The country is currently pursuing its Zambia Tourism Master Plan (ZTMP) which focuses on the development of leisure attractions and conference facilities to leverage the country’s comparatives advantage and rank among the most visited holiday destinations in Africa, as well as to become a regional conference hub.
The tourism sector has been the hardest hit by the COVID-19 pandemic with virtually no international tourist arrivals since March 2020 due to travel restrictions and subdued domestic tourist activity.