Levies and taxes are killing domestic travel

POST the 2010 World Cup, international tourism to South Africa has nose-dived. Most first-class tourist facilities are now desperately under-utilised. South Africa has become a trip too far and too expensive compared with a holiday in Europe for Euros20 on Ryanair.

Some 50% of South Africa’s taxes are paid in Gauteng, yet only 20% of the population live there.

Sometimes Gautengers travel. When 35000 South Africans enter a cycle race in Cape Town, one can come to only two conclusions: we have found a new urge to dress up in skintight technicolour outfits and go cruising in Sea Point; or a week or even a weekend away from Gauteng is still an integral part of life.

But, except for special occasions, Gautengers stay at home. They may take 10 days over Christmas at the coast. But generally they save their leave, preferring a week in Mauritius or two weeks in Europe in the middle of the year. Asked why, they will tell you they get far better value for money.

This week I picked up a cheap air ticket on the internet. R450 was quoted. But add airport taxes, levies and VAT, and the end price was R1121. That’s far cheaper than driving, but if it wasn’t a business trip, I would have stayed home.

Jeremy Taylor’s “Ag, please, daddy, won’t you take us off to Durban, it’s only eight hours in your Chevrolet?” is now 50 years old. It represents a time when fuel was cheap and there was no “tax on movement”. Today, a weekend in Durban in a 4×4, calculated at the AA rate, would be about R12000, excluding tolls and speeding tickets.

The environmentalists will tell you, “The best trip is the trip never taken.” But if we follow that, then 50% of South Africa’s wealth stays at home, while the rest of the country starves.

The airlines and the leisure industry are doing their best trying to create packages to lure back domestic tourism. But there seems to be no sign of relief from the Airports Company or SARS.

If we do not encourage domestic tourism, many of our facilities face an uncertain future. Can there not be some form of concession on air travel levies and taxes? It’s crazy that a domestic air ticket is VAT-leviable when international air travel is zero-rated. And surely a 45-minute flight to Durban is a damned sight more environmentally friendly than four hours to Mauritius or 10 hours to Europe.

Originally published in the Sunday Times Tax Talk column.

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