Tourism industry demands tax cuts to boost recover

The National Tourism Promotion Committee, which is chaired by Tourism Minister Kripasur Sherpa, has taken a number of measures to revive Nepal’s tourism which hit rock bottom after the earthquake.

The 36-member high-level committee was formed on June 16 through a Cabinet decision to carry out efforts to rebuild and promote the tourism sector in the aftermath of the April 25 disaster.  The government and the private sector have got together to launch tour packages at attractive and affordable rates in a bid to boost flagging tourist arrivals.

Likewise, the panel has decided to request the Finance Ministry and the Commerce and Supply Ministry to waive VAT on aviation fuel to allow carriers to reduce airfares. Likewise, the committee has decided to ask Nepal Airlines Corporation and the Civil Aviation Authority of Nepal to cut ground handling fees and landing-parking charges respectively for foreign airlines. Currently, the ground handling charge for a wide-body aircraft stands at $6,800 (Rs68,000) per flight. This burden is passed to air travellers in the form of an extra Rs3,000 on their ticket price.

Likewise, the navigation and landing-parking charge stands at $2,700 (Rs27,000) per flight which costs each passenger Rs1,300.

In addition to these extra costs, passengers flying out of Tribhuvan International Airport (TIA) have to shell out Rs3,260 each in airport development tax, tourism service fee and passenger service charge.

An airline official said that each passenger has to pay Rs9,000 extra due to different taxes, and that it had made Nepal one of the most expensive destinations in the world. For example, the normal fare on the Kathmandu-Kuala Lumpur sector is Rs14,000, but a traveller has to pay Rs24,000 because of the extra charges.

Based on the recommendation of travel trade entrepreneurs, the government has decided to reduce the airport tax to attract more tourists in the upcoming September-November peak season.   

As per the committee’s decision, the government has also decided to request the authorities concerned to waive income tax for at least a year and slash the interest on bank loans taken by tourism entrepreneurs besides extending the maturity period by a year.

The committee has also decided to form a Tourism Crisis Response Committee. It has set up three sub-committees to carry out reconstruction and tourism promotion in an effective manner.

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