SANGAM

HAN calls for easing VAT level

SANGAM PRASAIN
KATHMANDU, JUN 23 - The Hotel Association of Nepal (HAN) has urged the government to reduce the value added tax (VAT) on hotel sector to 10 percent from the existing 13 percent.
HAN will be content with withdrawal of 3 percent VAT in the matter of import of goods such as agriculture products where VAT is not imposed.
Talking about the new budget, HAN also asked the government to look into the main concerns of the hospitality industry by giving high priority to infrastructure development and tax breaks which are vital for boosting the growth of hotel sector in the coming fiscal year budget 2010-11.
With Nepal Tourism Year 2011 (NTY-2011) in sight, adequate infrastructure such as accommodation has become an immediate necessity in view of the possible surge in tourist arrivals. The government aims to attract a million tourists during NTY-2011.
A number of hotels have been been lying closed due to the decade-long conflict and the ongoing political instability is also hurting the industry.
“Private sector investment in hotel sector is Rs 150 billion and the sector is providing direct employment opportunities to a million people and indirectly to 3 million people,” said Madhav Om Shrestha, Executive Director of HAN.
HAN has also suggested the government operate Nepal Airlines Corporation in Public Private Partnership  model, converting it into a company. The government should immediately create an environment to make the national flag carrier competitive with other international airlines.
The government should enlarge the scope of Tribhuvan International Airport and rope in the private sector for the construction of Pokhara and Bhairahawa airports as regional airports under the Built, Owned, Operated and Transferred (BOOT) model. 
Considering that NTY-2011 is a national campaign, HAN has also
suggested the government provide free visa system for two years in
order to promote Nepal at the international level.
“In order to attract both domestic and international visitor beautification projects should be initiated in the periphery of Narayanhiti Museum and replaced the existing walls with wire-fence so that it can give a proper glimpse of museum from outside also,” Shrestha said.