Controversy Over Tourism Fund

The new Tourism Development Fund set up under the new Tourism Act which establishes the new Ghana Tourism Authority (GTA), generated a lot of controversy at one-day workshop to sensitise stakeholders in the tourism industry on the new Act in Koforidua, the Eastern regional capital.

The government was to provide seed money for the fund while one percent levy payable by patron of a tourism enterprise specified in the schedule would be paid into the fund.

In addition to this, monies earned by operation of any project, enterprise financed from the fund would be paid into it as well as donations and grants and monies that the Minister of Finance in consultation with the Tourism Minister may determine with the approval of Parliament.

The Act which gave authority to the establishment of the fund prescribed that the fund would be used to provide funding for tourism and tourism-related projects and programmes to market and promote tourism, to build capacity and develop tourism infrastructure as well as develop and promote other entrepreneurial activities, tourism export-trade oriented activities of institutions.

Hoteliers, restaurant operators and other service providers in the tourism industry who attended the workshop raised concerns over the government’s intention to establish the one-percent levy to be incorporated in the cost of operations by hoteliers, restaurants and the service providers in the tourism industries.

According to them, the one percent levy would definitely increase their already high cost of production and that would severely affect their operations.

Their concern also stemmed from the fact that they would be at the forefront to collect the levies for the ministry, yet they would not directly benefit from the fund.

They therefore suggested the levy was rather incorporated into the Value Added Tax (VAT).

The Deputy Minister for Tourism, Baba Jamal, who chaired the workshop, noted that it would be impossible for the tourism levy to operate under VAT.

He said countries which have made tremendously breakthrough in the tourism industry, have been relying greatly on tourism levies for the promotion of tourism in those countries.

He mentioned South Africa and Kenya, which had made so much progress in tourism as countries where tourism levies were as high as five percent or four percent because of what they knew tourism could do for their economies.

According to him, tourism was the third highest foreign exchange earner for the country and with the introduction of the new Tourism Act, it could become the leading foreign exchange earner for the country.

“We will use monies from the fund to develop tourist sites, build reception centres and also market and promote tourism outside the country, and by that, service providers in the tourism industry will benefit from the many tourists who would be visiting and staying in the country,” he said.

The President of Ghana Tourism Federation (GHATOF), Barima Kofi Adjei Twinim I, who is also the chief executive for Royal Plaza Hotels in Koforidua, supported the introduction of the tourism levy saying it would go a long way to improve tourism in the country.

He said hoteliers and restaurant operators should rather focus on improving on their services by upgrading their facilities and training their staff to help them reap the full benefit of the tourism levy with the increase in the number of tourists who would be visiting the country.