Tourism Levy raises operators’ ire
RETHABILE MOHONO & LIKELELI MAJARA
MASERU – The tourism levy introduced last week will benefit the government not players in the tourism industry, according to the Lesotho Council for Tourism (LCT) Chairman Tsunyane Tsotetsi, in an interview with Public Eye this week. This comes after the government, through the Lesotho Tourism Development Corporation (LTDC) last week announced the tourism levy of 1.5 percent for every service offered by guest houses, event organisers, tour operators, among others. LCT is an association that was formed to assist in the management of tourism in Lesotho.
“We were fine with the introduction of the tourism levy because we were part of the planning of the subject. The only part we are not comfortable with is the implementation where the government proceeded to implementation of the idea without our input or in our absence. We feel there are issues that were not addressed when the idea was implemented,” he said, explaining that the levy subject is a good idea but their concern is with the implementation part. “We did write a letter to make them aware that some of the concerns were not addressed in the levy’s implementation but we never got a response,” he said. Among some of the complaints, he said the levy committee is made up of six individuals, five from the government and only one member from the LCT.
“This says we do not have a voice. They can do as they please with the funds since we just have a single representative in the committee,” Tsotetsi said adding that they needed representation of a minimum of 50 percent or 60 percent private sector and 40 percent government. He said if the aim is to develop the private sector then, the private sector needs to be given a leading role. Apart from that, he said their other concern is the penalties that are imposed on the private sector while there are no incentives for doing outstanding work.
“We feel like there is nothing good meant for us, so we do not understand why we should even collect the levy when there is nothing in it for us,” he said. Tsotetsi complained further that the use of the collected money is also not fair to the private sector. “All the collected levy will be used by the government through LTDC. I mean, if 50 percent of the collection is given to LTDC, then, the umbrella body which is LCT is not going to function effectively,” he said complaining the allocations of funds are not fair to the private sector.
Last week, LTDC introduced a tourism levy which is tax paid by tourists for specific travel and tourism services offered with the intention to awaken and develop the tourism sector which has been struggling over the past two years due to the COVID-19 pandemic, which forced its total closure. The levy was supposed to be implemented in July 2022 but the stakeholders in the tourism sector pleaded with the government to lower the rates and review the regulations as the industry is only trying to find its feet after the pandemic. LTDC, revised the levy and published it on September, 30, 2022 after the concerns of the business owners were considered and it was implemented in October 2022.
Head of finance Thetso Thamae said the levy is intended to improve tourism in the country. He said 50 percent of the levy collected would be allocated and used precisely on marketing and promoting tourism to ensure that tourism development is achieved while 30 percent would be allocated to LTDC as an administration fee to be used in training the enterprises. In addition, 20 percent will be allocated to the tourism ministry to ensure smooth managing and regulating of the levy. “The tax or levy will be collected by enterprises directly from tourists and brought to LTDC,” he said highlighting that enterprises have already started the collection of the levy since the beginning of this month. He also urged the tourism sector to work hand in hand with LTDC to ensure the development of this country.
Meanwhile LTDC Chief Executive Officer (CEO) Dr. Rets’elisitsoe Nko said after 15 years of amending the Tourism Act 2006 Lesotho has finally decided to implement the tourism levy. “Through one of its programmes, Lesotho opted to invest more in tourism and implement investment in tourism strategy,” he said. He also highlighted that just like other countries, to ensure that the plan to invest in tourism is carried out there had to be introduction of tourism levy so as to meet international standards.
“The plan is to ensure that by the next financial year, tourism would have contributed to the government’s consolidated fund such that during the budget allocation the tourism ministry be given more money in comparison to the past few years,” he said adding that the initiative will also create job opportunities for Basotho. On the other hand, Masalang Khasake from the Tourism Levy Department said the business owners had been made aware that the levy will be implemented and they had been given three months to prepare themselves.
She said enterprises are expected to pay 1.5 percent on each person serviced. Travel agents are to tax M50 for each ticket, when the enterprises are expected to make the returns to LTDC by the 10th. In an interview, guest house owners who decided to stay anonymous, said the government does not care about improving the tourism industry, rather it wants to rip off their businesses. “We do not understand how we will be doing the collection ourselves when the government takes almost all the funds, we think this needs to be reviewed again so that we also have a say.”
