Wednesday, May 20, 2015

Fair taxation in tourism taken up in APEC meeting in Boracay

A discussion on tourism and taxation aimed at developing policies for a fair taxation system in the Asia-Pacific region's tourism industry opened in Boracay island, Aklan  Tuesday (May 19).

"I believe that properly constituted taxes are certainly a necessity and a legitimate fiscal tool for every economy. And a greater level playing field for private enterprises in the tourism sector should naturally contribute to it," Javier Guillermo Molina, lead shepherd of the Asia-Pacific Economic Cooperation’s (APEC) tourism working group, said in his welcome remarks at the Paradise Garden Resort.

Molina said the tourism activity in the region has been growing at a higher rate than the economy in general and it is one of the most dynamic economic sectors.

However, he said, this should not translate into an increase in taxes.

"The sector has proven to be resilient and contributed to the recovery of our economies. Thus, fiscal policymakers should bear in mind not only the short-term revenue but the medium and long-term, of its power to create economic growth and development," Molina stressed.

While designing new taxes, policymakers should not impose arbitrary taxes and levies, as this is counterproductive to the economy, sustainable tourism development, and tourist arrivals, he noted.

These unfair taxes could affect the sector's contribution to the gross domestic product, employment, and the development of micro, small and medium enterprises, he added.

Molina said policymakers should approach this case cautiously to ensure that it maximizes the growth of domestic and international travel and tourism in the region without creating hurdles in these activities.

He also suggested that economies start developing what the United Nations World Tourism Organization (UNWTO) refers to as "intelligent taxation policies", as opposed to uniform taxation.

This policy is aimed at ensuring the efficiency of the fiscal system by adopting it to the changing environment and the volatile requirement, he said, adding that this would be possible by keeping taxes simple, fair, and aimed at creating stimulus for growth.

"Taxes that do not end up killing the goose that lays the golden egg. Taxes that are correct," he said.

There has been a tremendous growth in travel and tourism in the region in the past several years, Molina said, noting that last year saw the growth of travel and tourism in the Americas by 7 percent, and in Asia Pacific by 5 percent.

The development in regional tourism is growing well above average and this creates more jobs and more business for the people in the APEC region, he said. (PCOO News Release)

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