Taxing Tourism in Developing Countries : Principles for Improving the Investment Climate Through Simple, Fair, and Transparent Taxation
A good investment climate for tourism, underpinned by a sound tax regime, can play a central role in a government's growth and development strategy. Yet in many countries, tax systems for the tourism sector are characterized by exemption schem...
| Main Authors: | , |
|---|---|
| Format: | Brief |
| Language: | English |
| Published: |
World Bank, Washington, DC
2012
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2010/06/13837868/taxing-tourism-developing-countries http://hdl.handle.net/10986/10485 |
| Summary: | A good investment climate for tourism,
underpinned by a sound tax regime, can play a central role
in a government's growth and development strategy. Yet
in many countries, tax systems for the tourism sector are
characterized by exemption schemes and instruments that
generate little revenue and burden business. This note
focuses on the three main issues facing policymakers dealing
with tourism taxation in developing countries: fiscal
incentives, sector-specific levies, and value-added tax
(VAT). It discusses different policy options to encourage
tourism investments while ensuring sustainable revenue
collection. A good business environment for tourism is
essential to support the industry's central role in
many countries' development strategies. Investments in
the sector, which has significant growth potential among
developing countries, can have important positive spillovers
on poverty reduction. Tourism is a complex industry of
numerous subsectors. It is challenging to define exactly
what constitutes a tourism product and how to tax it;
tourism is not a single commodity, but rather a collection
of many different goods and services provided by a wide
range of suppliers. The tourism value chain encompasses a
variety of different actors, including hotels, air carriers
and transport companies, tour operators, travel agents,
rental agencies, and countless suppliers from other sectors. |
|---|