<\/p>\n
Kathmandu. Various tourism associations have submitted a memorandum to the Finance Minister, Vishnu Poudel, suggesting various problems related to the tourism sector to be included in the upcoming budget. They have put forward various demands and submitted the memorandum to the Finance Minister. The team of the presidents of TAAN, NATTA, HAN and NMA handed over the memorandum to the Finance Minister.<\/p>\n
The demand has been made to fully remove the value-added tax (VAT) levied on airline tickets. Similarly, the demand has been made to remove the 2% luxury tax levied on five-star and high-end hotels. Trekking Agencies’ Association of Nepal (TAAN) President Sagar Pandey informed that the demand has also been made to implement the out-standing tax system on airline tickets, as in the Sri Lankan model.<\/p>\n
The demands submitted to the Finance Minister are:<\/p>\n
– Fully remove the value-added tax (VAT) levied on airline tickets<\/p>\n
Air travel is the first and main gateway for tourists visiting Nepal. However, the current 13% VAT on airline tickets makes the ticket price expensive, making Nepal less competitive compared to other competing destinations such as India, Thailand, Bhutan, Sri Lanka, etc.<\/p>\n
This has particularly affected the influx of regional and international tourists. If necessary, the Government of Nepal can levy a certain amount as a special fee similar to the airport tax to ensure the source. Therefore, the tax should be fully abolished to revive the tourism sector.<\/p>\n
It is appropriate to implement the suggestions and recommendations made in the recent special study report on VAT on airline tickets conducted by the Nepal Tourism Board.<\/p>\n
– Remove the 2% luxury tax levied on five-star and high-end hotels<\/p>\n
The luxury tax is negatively impacting high-end tourism. It is alienating international-level tourists from Nepal’s high-end services, which has also affected the earning of foreign currency. Therefore, to promote tourism, the luxury tax imposed on high-end service providers (five-star hotels) needs to be fully abolished.<\/p>\n
– Implementation of out-standing tax system on airline tickets<\/p>\n
An out-standing tax of minimum $30 to $50 can be levied on airline tickets issued outside Nepal, based on the Sri Lankan model, for air services originating from Nepal. This system will encourage domestic tourism businesses, reduce ticket transactions through foreign agents, and protect and empower Nepal’s tourism businesses.<\/p>\n
– Effective implementation of double taxation treaties to facilitate cooperation with international brands<\/p>\n
When cooperating with foreign management, brand franchising or investors, there is a situation of double taxation on the same income in Nepal and their home country. To prevent this, Nepal must fully implement the double taxation treaties it has made, which will support the attraction of international investment. A business-friendly legal framework needs to be created to attract foreign brands and management. It is necessary to ensure double taxation treaties, dividend tax simplification, and investment security.<\/p>\n
– Provision of tax exemption and subsidies for environmentally friendly (green) hotels and infrastructure<\/p>\n
To promote environmental protection and sustainable tourism development, tax exemptions, concessional loans, grants or tax rebates should be provided for the construction of hotels equipped with green building (LEED certification), solar energy, water conservation technology, etc. This will not only increase environmental responsibility but also improve Nepal’s image in the international market.<\/p>\n
-The need to implement a long-term and easy visa policy<\/p>\n
In order to make it easier for foreign tourists to enter Nepal, especially those who come to Nepal for long-term spiritual, trekking or health tourism, a long-term visa system should be implemented. Additionally, the online visa application system should be made more effective, user-friendly and secure.<\/p>\n
-Diplomatic coordination is necessary for the Kailash Mansarovar pilgrimage.<\/p>\n
Diplomatic initiatives at the highest level are required to resume the Kailash Mansarovar pilgrimage via Nepal from India, which promotes religious tourism. This can particularly target the Indian religious tourism market.Concessional loans and tax exemptions for small and medium tourism businesses<\/p>\n
-To revive domestic tourism and promote entrepreneurship, small businesses such as hotels, homestays, travel agencies, tour guides, trekking companies should be provided with banking access, concessional loans and tax-related exemptions. A system like the Farmer Entrepreneurial Loan should be used to provide low-interest loans to tourism entrepreneurs, which will help address the lack of capital and contribute to job creation.<\/p>\n
-Policy provisions to ensure service fees for travel agencies<\/p>\n
The current trend of international airlines not providing service fees to travel agencies needs to be addressed through legal provisions to ensure the sustainable business of travel agencies.<\/p>\n
-Digitization and mandatory adoption of Trekking Information Management System<\/p>\n
The Trekking Information Management System (TIMS) should be made fully online and e-TIMS based to monitor the activities, ensure security and manage data of foreign tourists. This will guarantee safety in the trekking areas and also contribute to state revenue.<\/p>\n
-Mandatory travel insurance policy for foreign tourists<\/p>\n
Foreign tourists participating in adventure tourism (such as trekking, mountaineering) should be required to have travel insurance. This will help transfer the burden of rescue costs in emergency situations from the government or private sector to insurance companies.<\/p>\n
-Policy to declare major trekking routes as ‘National Trekking Trails’<\/p>\n
Globally renowned trekking routes such as Kanchenjunga, Everest, Annapurna, Rara should be legally recognized as ‘National Trekking Trails’, enabling systematic development of infrastructure, information, security, and signage boards. The Great Himalaya Trail (GHT) stretching from east to west should be divided into ten sections and necessary infrastructure development, promotion and marketing should be carried out. This will establish Nepal as a premier adventure trekking destination in the world.<\/p>\n
-Necessary reforms in immigration<\/p>\n
Necessary reforms in immigration, including the Korala border crossing in Mustang, should be carried out to develop them as gateways for border trade and religious tourism with China and neighboring countries. This will bring a new dimension to the religious travel of Buddhist followers and tourism relations with China.<\/p>\n
-Integrated development of spiritual, wellness and trekking tourism<\/p>\n
Spiritual tourism should be developed by integrating monasteries, meditation centers, yoga ashrams, trekking routes, and cultural pilgrimage sites, such as Chume Valley, Rechen Gompa, Lumbini, Dolpa, etc.<\/p>\n
-Reclassification of hotels and tourism industry as a productive industry<\/p>\n
Currently, the tourism sector falls under the service sector, which does not have access to various tax exemptions. If the hotel and tourism industry is reclassified as a ‘productive industry’, it can avail of tax-related and other concession facilities, which will increase investment flow and create new employment in this sector.<\/p>\n
-Recognizing foreign tourism earnings as ‘export earnings’<\/p>\n
The income earned from tourism services provided to foreign tourists is a major source of foreign currency generation for the country’s economy and should be recognized as ‘export earnings’.This should be given the status of a commodity export, and other monetary incentives (such as export promotion allowance) should be provided.<\/p>\n
-Improve infrastructure and investment access<\/p>\n
-Restructure Nepal Airlines Corporation and add more aircraft<\/p>\n
The government-owned Nepal Airlines Corporation should be professionally strengthened to be able to compete internationally. Necessary budget allocation should be made to purchase new aircraft, improve human resources, and expand services.<\/p>\n
-Develop hill destinations as ‘hill stations’<\/p>\n
Areas like Pokhara, Palpa, Ilam, Dhankuta, Rara etc. can be developed as ‘hill stations’ as vacation destinations for the urban middle class. For this, facilities like roads, water, electricity, communication, hotels etc. need to be expanded.<\/p>\n
-Apply industrial electricity tariff to hotel and tourism infrastructure<\/p>\n
Since high electricity tariffs are charged for operating tourism infrastructure, hotels, resorts, and trekking holiday camps should be provided electricity at industrial rates.<\/p>\n
-Construct a convention center for MICE tourism promotion<\/p>\n
To systematize the growing international fairs, conferences and trade promotion activities in Nepal, it is necessary to establish and operate a convention center facility capable of hosting MICE (Meetings, Incentives, Conferences, Exhibitions) events. For this purpose, it would be appropriate to advance infrastructure development programs through a Public-Private Partnership (PPP) model.<\/p>\n
-Develop river-based tourism business<\/p>\n
To enable the long-term development, promotion and management of rafting and water tourism businesses, it is necessary to identify and categorize a specific river based on its tourism potential. After such categorization, targeted investment, infrastructure development, and business promotion programs can be implemented in the respective river and waterways.<\/p>\n
Therefore, as Nepal’s tourism industry is a crucial pillar for the country’s economic prosperity, the inclusion and implementation of the aforementioned strategic policies is imperative. If these suggestions are implemented at the budget and policy formulation level, Nepal’s tourism sector will become sustainable, inclusive and high-income oriented.<\/p>\n
The policy and program to be presented by the government for the upcoming fiscal year 2082\/83 is also appealed to incorporate these points and allocate the necessary budget.<\/p>\n
<\/p>\n
<\/p>\n
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