Investor Presentaiton

TAXES R - - GENERAL CHALLENGES FACING TOURISM IN ZAMBIA AND THE LOWER ZAMBEZI High burden of taxation on the tourism industry Zambian tourism destinations are accused by Government of being too expensive but the high cost of doing business through taxes, red tape and investor-unfriendly legislation whilst private sector subsidises GRZ's obligations to community, infrastructure and wildlife, that renders Zambia non competitive with Zimbabwe and other neighbours are created by Government. Aside from the multitude in stealth taxes levied upon the industry via various authorities and councils. Tourism cannot provide the growth, employment and development whilst burdened like this: 16% VAT on all tourism products whereas in Zimbabwe 14.5% VAT is levied only on accommodation, food & beverage, making tourism activities in Zambia 16% more expensive than in Zimbabwe, and F/B/A 2% more expensive. 10% service charge mandatorily and arbitrarily (no other country imposes this) charged on accommodation, food and beverages making such services 10% more expensive than they should be. 1.5% tourism levy effective January 01 2017. This is for tourism marketing and training however there is already a new skills/training levy per 2017 budget so the tourism industry is being taxed twice for the same. - High customs/excise taxation on inputs plus VAT impinging on cash flow and discouraging investment and renewals on tourism enterprises. These all contribute to making Zambia a very expensive tourist destination. For example, a typical safari lodge in Zambia with $1 million annual tourism revenue receipts in 2017, an indicative 50.4% of its revenues are paid directly to GRZ. In other words for every US$ a tourist spends in Zambia more than 50% of this goes to GRZ before a tourism company can service a tourist! TAXES

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