FOUR VILLAGES INN: THE NUMBERS

Posted on August 25, 2013

0


photo (18)
Probably my hotelier friends will think I’m crazy. What business owner divulges his numbers? But remember madinghana a.k.a. Four Villages is a migrant coming from the teaching profession, the public sector, and this is his first foray in the business world, the private sector.

Well, I do this revealing on the occasion of the implementation of new 1% tourism levy here in Ghana. July, 2013 was Four Villages Inn’s first full month paying the tourism levy tax for our guests….after all these revenues are to benefit our sector directly, but that’s another issue.

Now in filling in the form to pay the money into the Ghana Tourism Authority account at the Agricultural Development Bank, you have to declare the total Amount VAT Inclusive, then the Net Amount Basis to Calculate Levy, then the TL Net Value.

Well, in the month of July, Four Villages Inn, the No. 1 of 25 guest houses in Kumasi on the TRIP ADVISOR SITE BY FAR, in business since January, 2000, with a mammoth guide book and internet presence, rented out 67 rooms. Now, we have 4 rooms x 31 days in July so that equals a 56% occupancy rate. AND HEY, THAT’S A GOOD MONTH!

Now the monetary totals:

1. VALUE OF GOODS OR SERVICES ALL TAXES INCLUSIVE: GH C 16,686.00
2. TOTAL AMOUNT OF TAXES:GH C2176.50
3. TOTAL AMOUNT OF COMMISSION (where applicable) N/A
4. NET AMOUNT (On which Tourism levy is calculated) GH C 14,510.00
5. LEVY AMOUNT (1%) gh c (USD) GH C 145.10

Finding the 1% was NOT tough at the end of the month, but if I had to pay my guests’ VAT, as many establishments do, or say they do, now that would be tough paaaa (a lot).

This month after inputs i.e. expenditures of GH C185.50, Four Villages Inn paid GH C1,991.00 in VAT . Now if I didn’t collect the VAT from our guests, it would be tough to come up with that amount at the end of the month. But it’s no sweat.

Now commentary on the above:

1. Revealing my numbers: If you follow this blog, you will know I am very active in the Ghana Hotels Association, particularly here in Ashanti. A number of years ago, I served as the Executive Secretary of the Ashanti Region. Following that, I served as a Special Assistant to the Chairman. At this time, I tried to conduct a survey on occupancy rates. From many visits to hotels, I observed that many were empty just like Four Villages. And yet, as years went on, public officials would prey more and more on these poor businesses, all in the name of compliance of regulations, but really to fulfill a private agenda. I wanted to break the myth of success of the hotels in Ashanti. But to do so, it would be necessary to collect data.

Well, I got nowhere..hoteliers would not even divulge their numbers, not even anonymously!

2. My idea presented to the VAT Service, just to try on a pilot basis in one region, to regulate establishments quoting their rates VAT EXCLUSIVE went nowhere. Now the byword in development circles is innovation. Well I think experimentation should be added. Here’s the blog post making this proposal.

3. The SCRAP SHORT TERM TOURIST VISAS TO GHANA FB group campaign is one such call to experiment, and it is going nowhere. But at least it is bringing attention to the issue.

4. I am delighted with the implementation of the 1% tourism levy and linking it to the 15% VAT contribution, yet separating it from the VAT. In other words, I am glad that the VAT was not increased to 16% with 1% skimmed off to the tourism sector. This way maybe more VAT will be collected. I hope that the authorities will study contributions before and after the implementation of the tourism levy.

Advertisements