The International Air Transport Association (IATA) has expressed opposition for a proposed tourist tax, arguing that carriers should not bear the burden of the expenses that come with collecting it.
IATA Regional Director Vinoop Goel claimed that the income earned by Labour’s pre-election proposal of a $25 per head fee on foreign visitors would be overshadowed by loss of business.
In a letter penned and addressed to Transport Minister Phil Twyford, Goel argued that passenger numbers could plunge by 78,000 a year as price conscious consumers responded negatively to raised costs.
“We respectfully request that the New Zealand authorities actively reconsider the decision to impose the tourism tax and to use alternative revenue resources to raise funds,” Goel said in the correspondence.
Goel said IATA protests to any form or tax or fee where the income was not reinvested in aviation services or infrastructure.
He said Labour’s proposal infringed on an international aviation convention New Zealand had signed up to.
Exceptions for New Zealanders need to be manually processed and this administrative load, along with the financial expense, should not be carried by airlines.
IATA stated that if a tax was initiated, New Zealand officials should take care of collection.
However, the visitor levy is not yet final.
Tourism Minister Kelvin Davis stated he wanted to ensure they applied something effective and would be talking to the tourism industry and airlines before any final decision was made.
“We need to address the extra demands on facilities that are used by both visitors and residents, particularly where there are fewer rate payers.
“I’m working with my officials to explore the range of potential funding options through central Government – including a levy – and what options, or package of options, might work best,” Davis said.
Last year, a report commissioned by Air New Zealand, Auckland and Christchurch airports, and Tourism Holdings proposed an establishment of a $130 million a year infrastructure fund with resources coming from a 2% national bed tax and a $5 raise in the departure tax.
It stressed this would come to less than 1% of the average international visitor expenditure of about $3,700.