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Hotels association calls for reduction in VAT charges

The Ghana Hotels Association (GHA) has called for the reduction of Value Added Tax (VAT) charges of three per cent flat rate of the 12.5 per cent imposed on members.

The association said such a measure will help cushion them in the face of the financial hardship visited on their businesses since the outbreak of COVID-19 last year.

Due to the pandemic, hotels in Ghana have lost patronage significantly because of the restrictions of movements and social activities.

Event

At its first National Executive Council meeting in Koforidua, the Eastern regional capital, last Thursday, the President of the association, Dr Edward Ernest Ackah-Nyamike Jnr, said as a matter of urgency the government should consider the reduction of the VAT charges to a flat rate because the hotel business was gradually grinding to a halt due to very low patronage.

The meeting which was on the theme: “Resilience in the face of COVID-19 pandemic,” brought together national and regional executives of the GHA who deliberated on issues affecting the hospitality industry and how best they, together with stakeholders, could address them.

Decision

According to him, the association arrived at the decision after examining the basic cost involved in their operations.

“Such a reduction will ensure that we operate in a way to ensure our survival and that of domestic tourism,” Dr Ackah-Nyamike said.

With regard to the payment of regulatory fees by hotels, the president further requested from the government to either suspend or reduce them drastically to alleviate the prevailing challenges in the hotel business.

He also called on owners of hotels and other such facilities who were yet to register with the association to do so to enable them to chart a common course of regulating their activities to improve operations.

On efforts to contain the spread of the coronavirus, Dr Ackah-Nyamike said members were ensuring adherence to COVID-19 safety protocols by both staff and guests.

Growth

The Principal Resource Officer of the Ghana Tourism Authority (GTA) in the Eastern Region, Ms Bertha Appeynarh, said even though the hotel industry made some significant gains in 2019, the emergence of the virus had slowed down growth.

She said an outcome of initial assessment of the hospitality industry indicated that in the first quarter of last year, the industry lost about $471 million to the pandemic.

“We share your pain, we understand your challenges, we are with you in this difficult moment,” the officer added.

Ms Appeynarh also said under a Ghana tourism development project grant scheme, the sector ministry had secured $9 million funding from the World Bank and that it would soon be disbursed to eligible hotels.

The fund is to boost tourism and destination development as well as tourism enterprises support system within the value chain.

In furtherance of the fight against COVID-19, Ms Appeynarh said GTA had distributed personal protective equipment (PPE) such as Veronica buckets, hand sanitiser, tissue paper and face masks, among others, to some selected hotels across the country.

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