Tourism Industry Over Taxed—Operators Cries Lament

Players in the tourism and hospitality industry are vehemently calling on government to reduce the financial obligation charged them in form of levies, fees and taxes.

The industry counts of 21 different charges by separate government agencies.

This, they say is affecting their operations and also impeding implore of professionalism since they are mostly financially constraint to employ more qualified staffs to man their facilities.

The Hospitality industries in Ghana have financial obligations with about 12 agencies, including Ghana Revenue Authority, Ghana Tourism Authority, Food and Drugs Authority, Environmental Protection Agency, Immigration Service, Registrar General Department, Ghana National Fire Service, and the District Assemblies.

These exclude Electricity tariffs from the Ghana Electricity Company and Water tariff from the Ghana Water Company Limited.

According to some Hoteliers, the significant increment in utility bills over the last two years is one of the main reasons accounting for the rise in the cost of doing business in the industry, adding that Utility bills alone are reported to take up to 45 % of their cost of operation.

Hotel owners alarmed that the industry may soon collapse if the government does not intervene to mitigate the more than 20 financial obligation Hotel owners have to pay to government organization and agencies.

“As hotels, we use water and electricity commercially the current situation where over a two-year period we have suffered more than 200% in increment has not helped because most hotels are in crises because utilities form already over 45% of their cost of operation,” one hotel manager says.

Meanwhile, the Managing Director for Jumia Travel West Africa, a leading online travel agent also observed that the taxes are too high for a sector like the tourism industry.

“It should be lowered for the businesses because we are forced to charge high prices when providing services whether in a hotel or others in the tourism industry. So I think it is something that should be looked at,” Mr. Kushal Dutta said at the maiden Citi FM’s Business Festival Akwaaba Forum in Accra.

Jumia Travel West Africa recently released a report dubbed ‘Hospitality Report’, which focused on the domestic tourism industry in Ghana.

According to the report, domestic travel spending generated 56.7% of direct Travel & Tourism Gross Domestic Product in 2016 compared with 43.3% for visitor exports (ie, foreign visitor spending or international tourism receipts).

However, this is expected to grow by 5.4% in 2017 to GHC 5.1 M (USD 1.2 M), and rise by 5.3% pa to GHC 8.7 million (US$2 million) in 2027. This means although there is a challenge in developing domestic tourism, there is still unlimited potential and Ghana as a country must increase efforts to tap into this sector of the industry.