Levy suspension cripples local tourism industry
The Ministry of Tourism, Wildlife and Culture has decried suspension of the tourism levy last year due to Covid-19, saying it has paralysed the promotion of both domestic and international tourism.
The ministry’s spokesperson Sarah Njanji said in an interview on Friday that the ministry relies on the tourism levy for its marketing activities; hence, the suspension dealt the ministry a huge blow because national budget resources are inadequate for the purpose.
She said: “It has been rough for us since the levy was suspended. Tourism industry is a communication sensitive sector and when you stop marketing, you cannot achieve the goal of being competitive.
“At the moment, we are engaging Treasury to see if they can lift the levy suspension because we use the money to promote Malawi as a tourism destination for both local and international tourists.”
On April 1 last year, Treasury suspended the one percent tourism levy, which compels tourism industry players to remit to the ministry one percent of total revenue from all services offered to tourists.
The suspension was aimed at cushioning players in the sector from the impact of Covid-19 by ensuring that liquidity levels were mitigated from further shocks.
Njanji said in the 2020/21 budget, for instance, the ministry was allocated K43 million, which was not enough for marketing needs; hence, the levy is critical to achieving tourism marketing goals.
When the levy was suspended, the Malawi Tourism Council (MTC) said in a statement that it was not a solution to solve the financial problems within the tourism sector.
Last week, Presidential Task Force on Covid-19 eased restrictions by announcing that gatherings can now accommodate 100 people from 50 indoors and 250 people from 100 outdoors and also extended the operating hours to midnight from 8pm.
In a written response on Friday, MTC board chairperson Jones Malili said the relaxation of Covid-19 restrictions particularly on meetings and gatherings, will help to usher in recovery of the hospitality industry.
He said: “We believe that an upward adjustment of the number and timing while we diligently continue to implement all the other guidelines will go a long way in easing the pressure on the hospitality industry.”
The tourism industry has been heavily affected by Covid-19, with figures showing that 35 000 people lost their jobs by June last year and revenue in excess of K40 billion was lost.
In its recent report, the Reserve Bank of Malawi said due to the pandemic, tourism industry contracted by 9.9 percent in 2020 from an estimated growth of 4.8 percent realised in 2019.
The sector is one of the worst hit due to global travel restrictions, cancellations of conferences and meetings, restrictions on number of people.
