VAT, currency fluctuations to impact tourism industry: Cape Town Tourism

    Cape Town Tourism CEO Enver Duminy stated South Africa has significant potential to develop the tourism industry, while noting challenges such as currency fluctuations and the VAT increase (fin24.com, 22-Feb-2018). Mr Duminy noted the “impact on international visitors claiming a VAT refund”, adding: “Business systems industry-wide would have to be adjusted to deal with the change, again at a cost to those businesses”. He also noted: “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”. On the increased cost on air travel, Mr Duminy said: “When flying, there are many surcharges from airport tax, excess baggage costs and other service fees which will also increase as airlines flying into Cape Town and South Africa will need to claim increased VAT input”.