South Africa Tourism Industry Leaders Warn: VAT Hike Would Have Devastated SA Tourism and Hospitality
Following the postponement of the budget speech and the temporary halting of the proposed 2% VAT increase, key voices in South Africa’s tourism industry are weighing in on what such a tax hike would mean for one of the country’s most crucial economic drivers. David Frost, CEO of SATSA, commented: “South Africa has always been regarded as a value-for-money destination, offering an incredible travel experience at competitive prices. This has been one of our greatest selling points in attracting international visitors. A 2% VAT hike would seriously undermine this advantage, making travel to South Africa more expensive at a time when price sensitivity is at an all-time high.”
“The global middle-class traveller represents one of our biggest growth opportunities. These travellers are cost-conscious; they compare destinations carefully before booking. If South Africa becomes significantly more expensive due to higher taxes, they will simply choose other destinations that offer better affordability”.
“Tourism is not an industry that can absorb endless cost increases without consequences. Airlines, hospitality businesses, tour operators, and small tourism entrepreneurs cannot just keep raising prices – they will lose customers. The ripple effect would be devastating: fewer arrivals mean fewer jobs created, less revenue for local businesses, and ultimately less tax collected in the long run.”
“If government truly sees tourism as a key driver for economic recovery and job creation – as it repeatedly states – then it must abandon any plans for a VAT increase on tourism-related services. Instead of taxing success out of the industry, we should be implementing policies that make South Africa more attractive to travellers – not less.”
Source: Travel Daily News