June 1: Nepal Association of Tour and Travel Agents (NATTA) has expressed concerns over the government’s decision to impose 13 percent value added tax (VAT) on air-travel tickets for foreign visits and has demanded its withdrawal.
The government in the budget for the upcoming fiscal (FY) 2023-24 announced to levy 13 percent VAT on air tickets for foreign visits.
NATTA, as a representative body of tour and travel agents, believes the imposition of VAT on air tickets for international travel would negatively impact the tourism sector.
"The provision of charging 13 percent additional tax on air tickets for foreign visits makes it challenging to afford international trips when the international travel fair is already expensive. It is likely to affect the travel and tour business," NATTA Chair Ramesh Thapa said in a press statement on Thursday.
He said that the decision to impose additional 13 percent VAT on air tickets for foreign visits is applicable only when the ticketing is done from Nepal and it is not charged while proceeding for tickets from abroad.
"The domestic tour and travel business is certain to get affected by the decision when it is struggling to make through the post-COVID-19 situation. The decision hampers recovery efforts after the pandemic," added the statement.
Thapa further said that the government’s decision to impose additional two percent luxury tax on services of high-end hotels and restaurants was not expected at all.
However, NATTA welcomed the government decision to observe the period from 2023-2032 as the Visit Nepal Decade.
The priorities for the construction of the Nijgadh Airport, other airports, revival of cultural heritages, identification on new tourist destinations and acceleration of infrastructure development are other positive aspects of the budget, reads the statement.
The decision to allocate an additional budget of over Rs 2.5 billion to the tourism sector compared to the current fiscal year has encouraged the tourism and hospitality community, NATTA said. -- RSS