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Proposed tourism tax will harm NZ's economy - IATA

Contributor:
Fuseworks Media
Fuseworks Media

The International Air Transport Association (IATA) has urged New Zealand to reconsider the proposed 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 Vinoop Goel, IATA’s Regional Director for Member and External Relations, and Airport, Passenger, Cargo and Security, Asia Pacific, in a position paper submitted to New Zealand’s Transport and Tourism Ministers.

According on data from the World Travel and Tourism Council, New Zealand’s travel and tourism sector contributed 17.5% of New Zealand’s GDP and over 580,000 jobs. By 2027, these are expected to rise to 18.2% of GDP and 712,000 jobs. "The potential increase in GDP and jobs are put at risk by the proposed tourism tax," said Goel.

The tourism tax also contradicts with accepted international policies on taxation published by the International Civil Aviation Organization (ICAO), which does not support taxes on aviation that do not generate 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," said Goel.

IATA also pointed out that should the government decide to proceed with the tourism tax, the authorities should take direct responsibility for 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," said Goel.

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