AN INSIGHT INTO TOURISM LEVY
BY TOPSY SIKALINDA
TOURISM Levy was introduced on March 1st, 2017 by the government, through the Ministry of Tourism and Arts to augment the resources provided by the government for the development of the tourism sector.
Tourism levy is a levy imposed and collected from persons, both local and international, who utilise tourism enterprises i.e. accommodation establishments and events facilities. Accommodation establishments include hotels, lodges, guesthouses, bush camps, camping sites, caravan parks, backpackers, boarding houses, self-catering facilities and any building or premises used for accommodation by the public but exclude government rest houses, or company guesthouses specifically meant for their employees or boarding houses for schools, colleges or universities.
Tourism levy is charged at 1.5% of the total accommodation and/or events bill. It must be emphasised that tourism levy is only applied on accommodation and events services. Further, tourism levy should not be confused with Value Added Tax (VAT) and the service charges, as it is different from and is exclusive of these two charges.
An event, on the other hand, is defined as a meeting, conference, convention, exhibition, gala dinner, a social, family-oriented, or indeed a special occasion with 25 persons or more, or an organised occasion.
Tourism enterprises are responsible for charging and collecting tourism levy from their clients on behalf of the government which they then remit to the Zambia Revenue Authority (ZRA). To facilitate the collection of the tourism levy, tourism enterprises are required to register with ZRA for this specific tax type. After charging and collecting tourism levy from their clients, they are required to submit a tourism levy return and make any payment due by the 14th day of the month following the one in which the levy was charged.
There are several penalties for failure to comply with the requirements related to the tourism levy. The penalties include:
(a) Late Return Penalty
The due date for filing/submitting tourism levy returns is every 14th day of the month following the one in which the levy was charged. The penalty for failing to submit a return by the due date is 1000 penalty units (1 penalty unit = K0.30) which is equivalent to K300.00.
(b) Late Payment Penalty
The due date for the remittance of the tourism levy is every 14th day of the month following the one in which the levy was charged and late payment attracts a penalty of 5% of the unpaid amount per month or part thereof during which the tourism levy remains unpaid.
(c) Under-declaration or Understatement of Tourism Levy
Tourism enterprise operators are expected to charge and make correct declarations of the tourism levy so charged and collected from their clients as they submit their returns.
Any understatement in the return attracts a penalty of 5% of the omitted or understated amount.
To avoid being inconvenienced, please register as soon as your business becomes eligible for Tourism Levy.
we call upon all business houses to support the tourism sector by complying with the requirements. we can only build this industry if we all participate.
Remember, My Tax, Your Tax, Our destiny