Unto tourism a saviour is born
Two weeks ago, family, friends and sympathisers gathered in the mountains of the Eastern Region to “cover the back” of a man whose name became synonymous with tourism planning in Ghana from the mid-1980s through the mid-1990s. Ofosu Yeboah (‘O.Y’.) has gone the way of all mortals.
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ln a little tribute I shared with a few friends, I regretted that O.Y. had had to go at a time when tourism was set to blossom. when all the frustrations, sweat and tears from the late 1970s were just about to yield place to a new era of development at breakneck speed.
I can announce that after the long wait, after patient, pragmatic planning, from Obetsebi-Lamptey through Sai-Cofie, from Sena Dansua through Ofosu-Adjare, it can be said by even the most incurable pessimist that today, little by little, the egg is walking.
For the first time ever, the tourism sector has been able to order and pay for 17 four-wheel drives to facilitate its work. Also, the sector is now able to confidently approach sister government agencies to pledge tourism’s preparedness to contribute financially in fixing of access roads to tourist sites.
I am not done. Today, it has become possible for the sector to pay for Ghana’s stand at must-attend international travel fairs and fly marketing staff of the Ghana Tourism Authority (GTA) to go and sell Ghana. This, is an industry which, in the past, went cap in hand to ask for private loans to pay its way to fairs!
Bed Tax
It has taken an animal called “Bed Tax” to change all of that - the one per cent levy slapped on earnings by hospitality facilities such as hotels and restaurants, game parks, golf courses, conference facilities, etc. Officially called Tourism Development Fund, it took its nickname, “Bed Tax,” from its origins, when it was a tax on each hotel bed actually occupied.
The levy works like Value Added Tax(VAT). It is not a tax on profit; rather, a consumer tax, a one per cent “levy” contributed by consumers of the tourist product. So it is actually criminal not to collect it. It is even a worse offence not to account for it after collection.
Under L.I.2185 Tourism (Levy) Regulations 2012 of the Tourism Act 817, “Moneys for the fund shall be paid into a bank account opened by the authority with the approval of the Controller and Accountant-General.” After a rigorous procurement exercise, three banks – GCB, Universal Merchant Bank and Unibank – have been appointed to receive the levy.
O, you are right. Not every tourism facility has been paying; indeed, only 60 per cent of the 2,482 tourism establishments in Ghana are collecting and faithfully rendering account. That explains the GTA’s radio messages that have been running for weeks now.
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The education is working. From a previous monthly average of GH¢520,000.00, earnings have climbed to GH¢650,000 a month. As of April this year, the three collecting banks are, together, holding a little over GH¢11million of levy money.
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Abraham Tetteh’s Monitoring Teams, thanks to the arrival of the pick-ups, are constantly on the operators’ back. To avoid temptation, however, they don’t handle cash; they only demand to see the sales day book, the VAT receipts over a given period, the financial statement over the same period, the visitor registration book and the rack rate. Non-complying facilities are given three months to do so – or face penalties.
Surprisingly, some of the most vocal advocates for the levy are operators of upmarket facilities. As a manager of one of the four-star hotels in Accra told Yours Truly: “Quite a number of foreigners who come to my hotel tell us, through the evaluation forms they fill, that they heard about us through tour operators who interacted with Ghanaian marketers at travel fairs in UK, Germany, Spain and Holland.”
Role of levy
For the assurance of the one-two star and budget hotels, restaurants and car rentals in the regions, Mr Charles Osei Bonsu, the Chie Executive Officer (CEO) for the Tourism Authority and one of the technocrats who worked on the law, has a word: “When the tourist sites are upgraded and foreign tourists, as well as Ghanaians, are attracted to visit, the chief beneficiaries will be the private operators. The levy is being used to work on access roads to the tourist sites.”
This role of the levy is better expressed by the Minister for Tourism, Culture and Creative Arts, Mrs Elizabeth Ofosu-Adjare. “The whole levy thing,” she says, “is a symbiotic relationship. This one per cent which the private sector puts in with their right hand today, they will take it back with the left hand tomorrow. It’s a win-win.”
One of the thematic areas of the levy is infrastructural development. As I write, GTA is in talks with the Highway Authority for work to begin on such access roads. The first is likely to be the road leading to Kakum Forest. Thanks to the levy, GTA is not going cap in hand. It is ready to contribute financially to get the work done and done expeditiously.
Osei Bonsu’s word is confirmed by the minister, who says: “Kakum is our big cash cow. I can assure you that the Kakum road project, together with a number of others, is on our priority list. ”
Under the ‘Tourism Entrepreneurship-Oriented Activities’ thematic area, the levy will advance funds to private operators who show genuine need for support. Viable ventures by the private sector will be considered.
Some of the benefits are invisible. “With the levy taking care of infrastructure and marketing,” says the GTA boss, “the authority can now retain funds for other essentials such as Quality Assurance and Product Development, thereby strengthening the value chain.”
The levy is also to fund capacity building – not only of GTA staff, but even more importantly, staff of the operators. This is a relief for the operator since that headache will now be taken care of by the levy.