Hotels Association woes deepen

  • possible NADMO levy looms

The Ghana Hotels Association (GHA) is worried at recent developments, where officials from NADMO have reportedly visited certain hotels for inspection activities.

The GHA is however apprehensive that the move might lead to another levy from the Disaster Management Organization, and that could further deepen the existing woes of hoteliers and customers by extention.

Speaking to the Goldstreet Business, the Greater Accra Chairman of the Hotels Association, Benjamin Afunya said: “our members have reported the recent happenings where some officials from NADMO has begun inspections on hotel facilities.”

Mr. Afunya however said though NADMO did not charge any fees for the said inspections, the Association fears the organization could be tempted to impose levies in the future.

Taxes and levies

About 12 agencies, including the Ghana Revenue Authority, Ghana Tourism Authority, Food and Drugs Authority, Environmental Protection Agency, Immigration Service, Registrar General Department, Fire Service, and the district assemblies directly levy each hotel unit in Ghana.

Beyond these statutory regulatory bodies, government has also given legal backing to organizations such as Audio-Visual Rights Society of Ghana (ARSOG), Ghana Music Rights Organization (GHAMRO), Ghana Broadcasting Corporation (GBC), and Insurance Companies, to license and collect fees from operators of hotels on annual basis.

When these financial commitments are lined up together with the one percent (1%) Tourism levy paid by hoteliers, the VAT on services provided, Tier 1 pension contributions and the annual income tax, a real picture of an industry overburdened with taxes is created.

The situation, Afunya said, has made hotel rates very high compared to what hotels charge in other countries on the continent.

“Sometimes, visitors and tourists complain about the rates but we have no option than to stay in business,” he reiterated.

NADMO

Deputy Director-General of NADMO, Mr. Abu Ramadan, confirmed to the Goldstreet Business that his office has not sited any document from government mandating the organization to levy hotels.

“We have the authority to inspect facilities that could possibly pose dangers to the public. It may create panic among hoteliers but as it stands, nothing of levying hotels has been brought to our tables,” he assured.

Mr. Ramadan however, said the move to levy hoteliers is nonetheless a possibility, adding, “Government just put together a technical committee to review our LI and it’s possible such levies may be considered in the future.”

Consolidation

The association implored government to consider consolidating all the levies and taxes into one to enable hotels to cope with the pressure.

“We are in the era of consolidation, and so government could explore that avenue of amalgamating all hotel levies into one tax,” Afunya implored.

GHA membership

The GHA presently boasts of over one thousand members made up of budget, guesthouse, and one to five-star hotels spread across the ten regions of Ghana.

Ghana has an estimated 3020 hotels nationwide, with the hotel industry estimated to contribute about 250, 000 direct and indirect jobs to the economy.

Albeit, evidence presented by practitioners show a consistent decline in growth of the number of guests.

By Wisdom Jonny-Nuekpe