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IATA asks New Zealand to reconsider proposed tourism tax on foreign tourists

The International Air Transport Association (IATA) has called for New Zealand to reassess its proposal to levy tourism tax on international visitors.

“Aviation is a catalyst for economic growth. Making air travel more expensive through the tourism tax could reduce international passenger numbers to New Zealand by 78,000 annually. This could result in a NZ$100 million negative impact on the GDP and a loss of 1,200 jobs,” said IATA’s Regional Director for Member and External Relations, and Airport, Passenger, Cargo and Security in the Asia Pacific, Vinoop Goel.

Goel expressed his sentiments in a position paper he wrote and forwarded to New Zealand’s Transport and Tourism Ministers.

Data from the World Travel and Tourism Council shows that New Zealand’s travel and tourism sector pumped in 17.5% of New Zealand’s GDP and supported over nearly 600,000 jobs.

These figures are expected to jump even higher in the next 10 years.

“The potential increase in GDP and jobs are put at risk by the proposed tourism tax,” said Goel.

The tourism tax also goes against standard international policies on taxation set by the International Civil Aviation Organization (ICAO), which does not back taxes on aviation that do not produce funds which will be put back into aviation related activities.

“We strongly oppose any form of tax or fee where the resulting revenue is not reinvested in aviation services or infrastructure. This tax clearly increases general government revenues,” Goel stressed.

IATA also pinpointed that if the government decides to move forward with the tourism tax, officials should take the onus on its collection.

“The proposed tax calls for New Zealand citizens and residents be exempt from the tax. However such exemptions cannot be automated when tickets are purchased. It would be an administrative burden, cost and nightmare as airlines would have to process it manually. The practical approach is for the authorities to collect the tax themselves on arrival or departure so that the applicable exemptions are granted accurately,” stated Goel.

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