The Nepal Association of Tour and Travel Agents (NATTA) has called attention of the Finance Minister towards the air tickets becoming expensive due to the imposition of VAT on airfare by the government.
A NATTA delegation led by its president Ramesh Thapa met with Finance Minister Dr Prakash Sharan Mahat on Wednesday and called on the government to withdraw its decision to levy value added tax (VAT) on air tickets, citing that imposition of VAT on airfare through the budget for fiscal year 2023-24 has made the air tickets costlier.
“As both the domestic and international airfare in Nepal are already expensive at present, the airfare would become exorbitantly expensive with the addition of VAT in the present situation, and there is possibility of tourist arrivals falling down and the prospective foreign tourists opting for traveling to airports in Bagdogara, Gorakhpur among other airports in India due to their proximity to the Nepal border and the high airfare in Nepal,” Thapa said.
He argued that the decision of imposing VAT on airfare would have a serious impact on the government’s goal of bringing more than a million tourists to Nepal in the upcoming fiscal year.
NATTA said imposition of VAT only in Nepal would make the air tickets issued by Nepali travel agencies more expensive while it would be cheaper booking tickets online and in foreign countries. This will impel foreign tourists to book air tickets from foreign countries, resulting in loss of foreign currency earning and an increased risk of the government losing the tax it has been getting from the travel agencies and the loss of employment provided by the latter.
NATTA has also called for a change in the provision of the Nepali citizen having to purchase package tour from the foreign currency facility that one gets while going on a foreign tour.
In the meeting, Finance Minister Dr Mahat expressed the commitment that the government would take measures so that the tourism entrepreneurs would not face problems for the development of tourism sector in Nepal.