Jaitley advocates for low tax regime in tourism sector
August, 22nd 2014
Advocating for low taxation regime, finance minister Arun Jaitley on Thursday said if higher taxes are levied on the tourism industry, then there will be less tourists and lesser revenue collection.
"If tourism industry, state governments and the Centre are loaded with higher taxes then we will have less tourists and lesser collection," he said at a tourism ministers conference here.
Hinting at the existing higher taxation on tourism sector, Jaitley said, "Today, wealthy Indians are finding it cheaper to get their children married in Thailand than in Indian hotels. It's a hard reality."
Tour operators are demanding reduction in various taxes for long particularly exemption of service tax on packaged tours as the payment is made in forex.
Jaitley said the present government at the centre believes that "we are low taxation government not high taxation. If you leave more money at the hands of tax payers he would spend more. The economy expands more. If you levy lower taxes then products will be cheaper their saleability increases."
Seeking lower room rates and deduction in airfare, the Union minister said, "This principle applies to airlines and hotels also. If our airline is going to be costlier, if hotels are going to be costlier in comparison to the rest of the world, our volume will never increase. Costly rooms rates means less tourists. Less tourists means lower revenue for the government. Higher taxation on tourism means less tourism. which means lower earning."
Highlighting the importance of tourism industry, he said "if India is to grow and Indian economy is to grow then tourism is certainly one of the low hanging fruits which is achievable."
Dubbing the tourism sector as one of the "underachieved sectors" in India, Jaitley said we have everything going for tourism in the country like large coastline, huge mountain range in various parts of the country, seasonal variations in terms of weather, most beautiful rivers and forests in different parts of the country.
"We have archaeological monuments which are of great global interests. We have some of the best pilgrims centres in the country. We have large cultural heritage and we have great metropolitan cities. So world should have been extremely curious to see what lies in India," he added.