Kathmandu: Tourism entrepreneurs have demanded the removal of the value-added tax (VAT) imposed on air tickets. During an interaction with entrepreneurs and stakeholders on the tax imposed on air tickets hosted by the Nepal Association of Tour and Travel Agents (NATTA) here Thursday, speakers suggested removing the VAT on air tickets.
According to National News Agency Nepal, the entrepreneurs claim that the increase in ticket prices has affected foreign tourists coming to Nepal. Chairperson of the Nepal Airlines Operators Association Manoj Karki stated that the VAT imposed on air tickets has also affected airlines and forced air passengers to purchase tickets at higher prices. He emphasized that this has directly impacted not only aviation but also other tourism businesses.
Senior Vice President of the Nepal Mountaineering Association Thakur Raj Pandey highlighted the need to revise the taxes imposed on tourism businesses, including the aviation sector, in the budget for the upcoming fiscal year. Former NATTA president Madhu Acharya suggested that the government should consider removing the tax imposed on air tickets and explore other alternatives. He cited the example of neighboring India, which imposes a tax of five percent on domestic and 12 percent on business class tickets. Acharya pointed out that the high cost of air tickets has led to a decline in foreign tourist arrivals.
Restaurant and Bar Association of Nepal (REBAN) president Sangharsha Bista claimed that VAT has not fostered a business-friendly environment and has adversely affected overall business operations. It may be noted that the government had imposed VAT on air tickets through the budget statement for the current fiscal year 2080/81.