Luxury tax on hotels should be abolished in upcoming budget: HAN President Shah

Published On: May 24, 2024 06:05 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, May 24: President of the Hotel Association of Nepal (HAN), Binayak Shah, has said that the luxury tax imposed on hotels should be abolished through the next national budget. HAN President Shah added that the government has imposed a luxury tax on hotels in the budget of the current fiscal year and that it has not portrayed a positive message to the international sector. Therefore, this tax should be abolished in the budget of the next fiscal year, he said. 

Shah said that the government should widen the range of taxes for tourism promotion but it should not add new taxes. He said that due to the implementation of the luxury tax, it is not possible to compete in the international arena. President Shah said that although international standard airports have been built in Pokhara and Bhairahawa, they have not been put into operation. “Tourism professionals expect tourism promotion policies from the government,” he said.

“The current situation is challenging. At present, we can serve as many as 3.5 million tourists. But only around a million tourists come to the country in a year. As the hotels are operating in only one third of their capacity, we should work on improving our occupancy rate. Airports of international level have been built in Pokhara and Bhairahawa. They have not been able to come into operation. Tourism professionals expect a lot from the budget. The government should come up with a policy so that the tourism infrastructures built for the promotion of tourism can be put into operation immediately. Investments in the tourism sector have not yielded returns. Bank loan installments and interest have not been paid. The government should facilitate that.”

"Burdening the hotels with the luxury tax has backfired this fiscal year. It has not portrayed a positive image globally and put us at a disadvantage compared to other countries. While taxes in the tourism sector have expanded, no new initiatives have been introduced. The government has announced a 'tourist decade' in the budget, alongside focusing on agriculture, employment, and IT. However, little progress has been made in realizing the goals of the tourist decade. We anticipate a departure from  last year's budget in the upcoming fiscal year,” he said.

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