Kathmandu, March 28: Tourism entrepreneurs have urged the government to remove the Value-Added Tax (VAT) on air tickets, citing its negative impact on the tourism industry.
During an interaction organized by the Nepal Association of Tour and Travel Agents (NATTA) on Thursday, stakeholders and industry experts called for the removal of VAT, arguing that rising ticket prices have discouraged foreign tourists from visiting Nepal.
Manoj Karki, Chairperson of the Nepal Airlines Operators Association, stated that VAT on air tickets has increased travel costs for passengers and negatively affected airlines, ultimately impacting the entire aviation and tourism sector.
Similarly, Thakur Raj Pandey, Senior Vice President of the Nepal Mountaineering Association, emphasized the need to revise tourism-related taxes, including those imposed on the aviation sector, in the upcoming fiscal budget.
Former NATTA President Madhu Acharya suggested that the government should explore alternative taxation methods instead of imposing VAT on air tickets. He cited India’s lower tax rates—5% on domestic flights and 12% on business class tickets—as an example of a more balanced approach.
Sangharsha Bista, President of the Restaurant and Bar Association of Nepal (REBAN), argued that VAT on air tickets has not created a business-friendly environment and has adversely affected the overall tourism industry.
It is noteworthy that the government introduced VAT on air tickets in the current fiscal year (2080/81) through its budget announcement. #VAT #AirTickets #nepal #REBAN #NATTA
