Don’t make tourists soft target for taxation – WTTC

The World Travel and Tourism Council (WTTC) has urged governments to desist from seeing travelers as a haven for taxation.
Taxation within the travel and tourism industry is rampant all over the world but the Chief Executive Officer and President of the WTTC, Mr David Scowsill, said governments must stop seeing travelers as a soft target for taxation.

Governments, he said need “to stop viewing passengers and tourists as a revenue source and realise that they are a revenue generator."

He made these comments at the Airports Council International World Annual General Assembly held in Istanbul, Turkey, recently.

The global travel and tourism industry contributed some US$6.6 trillion to the total value of goods and services produced in the entire world in 2012.

That translated to about nine per cent of the year's global GDP, in 2012. That notwithstanding, governments the world over still see the sector as one that can easily be taxed to meet domestic revenue pressures.

The CEO and President of the WTTC, a global body of travel and tour operators, however, want that notion to end.

Speaking to airport executives, Mr Scowsill said “taxation within the travel and tourism industry is rampant all over the world – but particularly aviation taxes and airport taxes”.

But aviation is not unique in being targeted by governments as a revenue-generating sector, according to him. He said  “in many countries there are additional hotel taxes, food and beverage taxes and even culture taxes.”

“It is for this reason that WTTC has made taxation a key battleground for the industry, through its 'Policies for Growth' agenda. This is a wide-ranging series of initiatives, spearheaded by WTTC members where the private and public sector work together to ensure that the business environment is conducive to the growth of the industry; planning and investing in the appropriate infrastructure; and creating a tax regime which allows the private sector to be competitive."

"Our job is far from done on this issue. We will continue to lobby government to reduce the tax burden on our industry," he added.

His comments come barely two years after Ghana's government commenced the implementation of new airport tax amidst some resistance from airlines operating in the country.

The tax, which was captured in the 2011 Budget and Economic Statement of the government, forced airfares to go up by an average of about US$25 at the time.

This, the CEO and President of the WTTC sees as unfair to the growth of the travel and tour industry.

"Taxes must stimulate growth rather than thwart it," Mr Scowsill said.

He also praised the Turkish government’s approach to tourism in the last 10 years which had led to travel and tour accounting for almost 11 per cent of Turkey’s total economy.

"Turkey should be congratulated for its forward-looking approach to travel and tour. It has recognised the huge economic and social contribution of our industry as a driver of economic growth and job creation." He said, noting that the industry currently employs over two million people.

By Maxwell Adombila Akalaare/Graphic Business/Ghana