AG raises alarm over poor collection of bed levies

By Kwanele Dhladhla

Auditor General Timothy Matsebula has sounded the alarm over weak revenue collection controls in the tourism sector, warning that the Eswatini Tourism Authority (ETA) is losing significant income due to poor compliance with the bed levy system.

In his recently tabled audit compliance report, Matsebula revealed that only a fraction of the country’s tourism establishments was remitting the mandatory bed levies, with the majority either defaulting or being left unchecked by the Authority.

“I noted from the report to management that upon review of the list of establishments in the country, it was revealed that only 59 (31.2 per cent) out of 186 establishments paid levies to the Authority in the year 2024,” Matsebula wrote.

The Auditor General expressed concern that there was no evidence of routine follow-ups being made to ensure monthly remittances, nor proof that the levies received were accurate.

Even more worrying, he said, was the absence of internal control systems to manage and enforce levy collection.

According to the audit report, note three of the authority’s financial statements showed that receivables on bed levies had climbed to E1,779,371.00 as at March 31, 2024. This represents an alarming 68.8 percent rate of uncollected revenue.

“I am concerned that the authority is struggling to collect bed levies from the establishments, and there are no controls that enforce compliance.

I am also concerned that the Authority is losing revenue since the bed levies are not being collected from 68.8% of the establishments,” Matsebula stressed.

The AG advised management to urgently implement robust internal controls to enforce compliance across the tourism industry, warning that continued laxity would deprive the authority of critical resources needed to support its operations and national tourism growth.

He further requested that management provide a detailed breakdown of receivables, along with ledgers and supporting documents such as establishment registers, invoices, proof of payments, and statements of accounts.

“Management was advised to ensure that there are controls to enforce compliance by all establishments to maximize the collection of levies,” Matsebula stated.

In response to the findings, the controlling officer assured the AG that corrective action was being taken. The authority has since submitted a detailed breakdown of bed levy receivables, which includes invoices and records of payments received.

Management also provided the bed levy collection strategy, a document recently approved by the authority’s board, which outlines measures to improve compliance and reduce receivable amounts.

However, Matsebula cautioned that the strategy’s effectiveness must be proven through measurable outcomes.

“The effectiveness of the newly submitted Bed Levy Collection Strategy should be monitored through measurable outcomes, including an improved rate of compliance and a reduction in receivables amounts,” he advised.

The bed levy, a small fee charged per night of accommodation, remains one of the primary sources of revenue for the Eswatini Tourism Authority. It was designed to ensure that the tourism industry directly contributes to the promotion and development of the sector.

Failure to collect this levy consistently undermines the authority’s financial base and, by extension, its ability to market Eswatini as a competitive tourism destination regionally and globally.

Industry observers note that with the tourism sector being one of Eswatini’s key economic pillars, proper financial discipline and accountability are crucial. The AG’s report has therefore put pressure on the ETA to enforce compliance without delay.