Kathmandu, June 22
The Nepal Association of Tour and Travel Agents (NATTA) has called the attention of the Finance Minister to 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 the 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 the possibility of tourist arrivals falling down and the prospective foreign tourists opting for traveling to airports in Bagdogra, 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 the imposition of VAT only in Nepal would make the air tickets issued by Nepali travel agencies more expensive while it would be cheaper to book tickets online and in foreign countries. This will impel foreign tourists to book air tickets from foreign countries, resulting in loss of foreign currency earnings 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 tours 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 tourism entrepreneurs would not face problems in the development of the tourism sector in Nepal.