NATTA concerned over imposition of 13 percent VAT on air-travel tickets

Nepal Association of Tour and Travel Agents (NATTA) has raised concerns over the decision to impose a 13 percent value-added tax (VAT) on air-travel tickets for visits abroad and demanded its withdrawal.

The government in the budget for the upcoming fiscal 2023-24 announced to levy a 13 percent VAT on air tickets for visits abroad.

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 a 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 and it is capable of affecting the travel and tour business,” it Chair Ramesh Thapa said.

As he said, the decision to levy an additional 13 percent VAT on air tickets for foreign travel is applied when its process is made from Nepal and it is not charged while proceeding for tickets from abroad.

“The domestic tour and travel business is certain to be marred by the decision when it is struggling to make it through a post-COVID-19 situation. The decision hampers recovery efforts after the pandemic.”

Thapa further argued the 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 a visit year.

The priorities to the constructions of the Nijgadh Airport, other airports, revival of cultural heritages, identification on new touristic destinations and acceleration of infrastructure development are other positive aspects of the budget.

The decision to allocate additional over 2.5 billion budget to the tourism sector than in the current fiscal year encourages the related community, it is said.