KZN MEC for Economic Development, Tourism and Environmental Affairs Michael Mabuyakhulu has responded to industry concerns over the newly announced 10% hospitality levy for KZN, which will be implemented from April next year.
Addressing the industry yesterday, Mabuyakhulu said KZN needs to continue to focus on organising business events, as this is an area in which the region excels. He explained that during the past few years, KZN has won over 40 bids, representing an economic benefit of R2bn for the region, or R500m per annum.
However, if the province wants to continue to position itself as a ‘mega event’ destination, it will need to establish a bid support fund with the aid of the private sector, said Mabuyakhulu. He explained the KZN budgets had been drastically reduced, which meant the province is now faced with declining resources.
Both the TBCSA CEO, Mmatšatši Ramawela and the KZN representative for Tomsa Gail Westphal, appealed to the MEC to engage with them about a way forward with the Tomsa levy instead of an additional KZN levy. Westphal said the Tomsa Board was always open to suggestions. “Let’s not confuse the market with yet another levy,” she said adding that a 10% increase in prices would push tourists to drop KZN out of their itinerary.
Mabuyakhulu replied however that the Tomsa levy was collected solely for the purpose of SA Tourism’s marketing in overseas countries. He said: “The truth of the matter is that the Tomsa levy is in no way benefitting KZN in dealing with the issues we are facing. Tomsa will not assist us in bidding for events.”
The KZN industry present at the briefing was divided over the merits of a hospitality levy, but agreed that the proposed 10% levy was simply too high and unachievable. John Chance, owner of Essenwood House, commented that it is utterly impossible for the small business sector to contribute another 10% in the middle of a world recession.
Mabuyakhulu reacted by saying that if 10% proved to be too steep for the industry, he was willing to l reassess it. He added that a committee would be set up, consisting of industry players and government officials to discuss the ‘nuts and bolts’ of the levy. The committee would also make sure there was a transparent and accountable structure for the levy. Mabuyakhulu said: “Levies will not go to the government. This nonsense that you read that the ANC is giving money to its friends is absolute hogwash.”
Mabuyakhulu saidthe committee will work together until the end of November, at which time it would present a proposal outlining a way forward. He said: “This issue is not about me just wanting to create a challenge for the industry or wanting people to price themselves out of the market. This is about us and how we can build a competitive environment together.”
