Jun 16, 2024

Tourism entrepreneurs demand removal of tax on Tourism and Aviation

Tourism entrepreneurs demand removal of tax on Tourism and Aviation

KATHMANDU, June 10:The government has recently imposed a 13% Value Added Tax (VAT) on tourism and aviation services, which is being heavily condemned by entrepreneurs in the tourism field. 15 such organizations state that the tourism industry cannot handle the tax imposition. They warn that while the industry is attempting to rebound from the Corona Pandemic, such a tax imposition would collapse the industry and they would be forced to hand over the key to their businesses and halt all action immediately.  They lament the imposition of such a tax without any prior research, and claim that if the decision goes through, the industry wouldn’t be able to sustain it and the government would be responsible for paying back the loan owed by the businesses to the bank.

Nepal Association of Tours and Travel Agents (NATTA) chairman, Ramesh Thapa, says that the government doesn’t consult any associations affiliated with tourism when creating any policies or programs in the sector despite being advised to do so. He states that the industry cannot handle the tax as air travel being more expensive would negatively affect both domestic and international tourism. He recommended that any tax should be applied in a modality that doesn’t increase, if not the businesses would collapse and any loan along with the employees’ salary would have to be paid by the government.

The chairman of Trekking Agencies Association of Nepal (TAAN), Nilhari Bastola, agrees with Mr. Thapa and says that this is path of ruin for the tourism industry which forces them to cease all business. He expects the government to fulfil its pledge of protecting businessmen by removing the taxation mentioned in the budget.

Chandra Rijal, the Vice chairman of Nepal Tourism Board (NTB) claims that welcoming 10 lakh tourists would make them cry, under these circumstances. He says that the VAT system has been brought up in the past and the experts from TAAN, HAN, NATTA, NEB, etc. should be consulted to form a VAT system. He said, “Mountaineering requires mules, hotels are not taxed, PANs are not registered properly. So, we must bring forward that bill ourselves.”

Nepal Association of Rafting Agencies (NARA) chairman, Shiva Adhikari, advises the formation of a group of experts to apply a multi-VAT system, which is to levy the tax after a year. He said that, “This is a request from the entirety of the tourism businessmen. We are unable to pay the 13% VAT currently, as bookings have already been done.”

The organizations supporting these views are: Trekking Agencies Association of Nepal (TAAN), Nepal Association of Tours and Travel Agents (NATTA), Hotel Association Nepal (HAN), Nepal Mountain Instructors Association (NMIA),  Airlines Operators Association Nepal (AOAN), Village Tourism Promotion Forum Nepal (VITOF-NEPAL), Nepal Mountaineering Association (NMA), Nepal Association of Rafting Agencies (NARA), Himalayan Rescue Association (HRA), Expedition Operator's Association Nepal (EOA), Society Of Travel and Tour Operators (SOTTO Nepal), the Nepal Tourist Vehicle Association (NTVA), the Tourist Bus Association of Nepal (TBAN), the Nepal Association of Tour Operators (NATO), the Thamel Tourism Development Council (TTDC), and the Association of Kailash Tour Operators Nepal (AKTON).