The Namibian Tourism Board (NTB) finds itself between a rock and a hard place when it comes to reigning in unregistered accommodation facilities, a situation which continues to dent the collection of levies from industry players.
The situation, coupled with limited human resources to enforce tourism laws, is the reason why NTB is failing to attain a 100% revenue collection rate, says NTB CEO Digu //Naobeb.
A tourism levy is a non-taxable amount paid to the NTB by hospitality establishments and is normally included in the money tourists or visitors staying at lodges and other tourism accommodation establishments have to pay per day/night.
Every registered accommodation establishment, other than a campsite or a camping or caravan park, must pay a levy to the NTB as stipulated by regulations.
During the last two financial terms, the travel and hospitality governing body collected levies from more than 2050 accommodation facilities.
During the 2016/17 financial year, NTB collected N$39 million in levies. During the current financial year, which comes to an end in April, the collection numbers stood at N$39 million by end January 2018.
//Naobeb said NTB aims to collect more in levies this year despite the existing challenges in the collection system.
“Some accommodation facilities are operating without being registered, and then you have those who have never paid levies since being registered. Some establishments are underreporting and therefore paying less than they are supposed to,” lamented //Naobeb.
//Naobeb said the lack of man power on the ground is one of many shortcomings that hinder proper regulation of accommodation facilities in the country. NTB only has six investigating officers who are supposed to collect levies and inspect hospitality standards countrywide.
“We cannot access the books[of businesses] so we rely on the owners of these establishments to be proactive and share information with us. But moving forward, we have made proposals for the amendments of the Act so that it allows us to appoint an auditing firm to peruse the books of tourism establishments,” said //Naobeb.
Levies are NTBs main revenue source.
Under the hotels category, Hilton Hotel, Safari Hotel, Windhoek Country Club, the Protea Hotels take the lead when it comes to levy payments.
In the Lodges category, //Naobeb pointed to the Gondwana Group and Wilderness Safaris Group as the biggest contributors to NTB when it comes to paying levies. Namibia Wildlife Resorts takes the lead in the rest camp category.
Self-catering accommodation facilities together with guest farms make up the largest chunk of the registered businesses, but only bring in about 1 per cent of the levies collected.
There are about 800 businesses under this category.
//Naobeb feels it is somewhat impractical to dispose human capital to regulate self-catering establishments and guest farms when they do not reap as much from these facilities.
“It doesn’t make sense that we have to spend so much on doing inspections and regulating business that brings us less than 10 percent,” he said.
//Naobeb also expressed mixed feelings over AirBnB platforms that have become breeding grounds for unregistered businesses.
“These are the people who have accommodation facilities that they wish to rent out during peak seasons. It becomes a little difficult because we should also realize that these businesses pull tourists to the country who at times struggle to find accommodation but still come spend money here,” he explained.
He added: “The registration process is cumbersome and requires a big capital outlay.
Potential tourism operators need to register for tax, obtain a trade name from the Trade Ministry, apply for a business fitness license with local authorities and other regulatory legislative requirements that they would need.”
“Once you have done that, there are certain minimum standards that require you to upgrade the facility in order to obtain a license from NTB. The process is just too cumbersome, hence people opt not to register their facilities,” he lamented.
As for those who do not comply, //Naobeb revealed that NTB pressed charges against non-compliant establishments.