Tourism entrepreneurs urge govt to remove taxes on tourism and air services

Published On: June 9, 2023 07:45 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, June 9: Tourism and aviation entrepreneurs have jointly expressed their displeasure over the tax rates announced by the government for the next fiscal year 2023/24. Tourism entrepreneurs also submitted a proposal to the government  in this regard on Friday.

They have proposed to form an expert group by including all the stakeholders and organizations related to the tourism sector and make an in-depth study and the declared taxes applicable only after a year.

The Trekking Agencies’ Association of Nepal (TAAN), the Hotel Association of Nepal (HAN), the Airline Operators Association of Nepal (AOAN) along with one and a half dozen organizations jointly made this proposal on Friday.

Entrepreneurs made such a proposal to facilitate the revival of the tourism sector, which has just recovered from the Covid-19 pandemic. They also said that the announcements made in the budget will have a negative impact on the tourism industry and the government should pay attention to this issue seriously.

The government has brought the services related to tour packages and air tickets under the ambit of VAT from next fiscal year. On top  of that, luxury hotels and resorts with a rating of five stars or above have to pay an additional 2 percent luxury tax on their offered services.

It has been announced that Nepalese citizens visiting foreign countries on tourist visas will have to pay a 5 percent tourism fee for foreign trips. Due to this, the tour packages of Nepal will become more expensive and the tourists coming to Nepal will go to neighboring countries and other destinations.

As a result, the government's target of welcoming 1 million tourists this year will be affected, and the private sector has warned that the target set for tax collection will not be achieved. 

Entrepreneurs have complained that the tourism sector lacks recognition as an industry, resulting in the deprivation of concessional interest rates and electricity tariff benefits from the government.

Furthermore, the entrepreneurs have warned that if their demands are not met, they will launch a protest.

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