VAT increase to impact tourism industry – CEO

CAPE TOWN- Enver Duminy, CEO of Cape Town Tourism believes now is the time to react and respond to the challenges the tourism industry is expected to have after the finance minster speech.

He said, “We’d appeal to tourism businesses to ensure that their pricing is fair when it comes to international visitors, and that all messaging around water shortages is aligned and carefully considered,”

“We don’t want to alienate source markets by sharing scare-tactic stories. Rather, we must continue to take practical steps to reduce water consumption and ensure that visitors are aware of their role in reducing their impact on our resources.”

Tourists spend more than R15bn in Cape Town and the local industry supports almost 50 000 jobs and Duminy explained tourist contribute a lot to the economy and their input influences economic growth.

“The water crisis should not, and does not have to, result in an economic downturn for the City,” said Duminy.

Duminy also commented on the VAT increase, as the increase will increase business cost  and it will affect the consumer eventually , he said

“There’s also an impact on international visitors claiming a VAT refund. Business systems industry-wide would have to be adjusted to deal with the change, again at a cost to those businesses,”

“Tourism businesses will have to rethink their marketing and pricing strategies to compensate, as well as seek out other ways of increasing efficiency to compensate for a VAT increase, or else put some mechanism in place to recover the VAT input tax credit,” said Duminy.

Photo Credit- Cape Town Tourism

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