Tourism Taxes

As the economic benefits from tourism accrue to the wider economy, levying a discriminatory tourism tax on an enabling sector like aviation is an ineffective and ill-conceived policy choice. Government funding of tourism and tourism-related initiatives should be achieved without disproportionally targeting one sector. In certain cases, imposing a tourism tax can result in the diversion of tourists and air passengers to neighbouring jurisdictions that do not impose such a tax. The loss in economic activity due to the resulting decline in demand for tourism-related services is further compounded by lower than expected government tax revenue due to diverted air travel.

Additionally, IATA strongly opposes any form of tax or fee where the resulting revenue is not reinvested in the aviation industry and is merely meant to increase general government revenues. Such a tax or fee contradicts ICAO principles, where fees charged on air transport are to be associated with services provided in support of aviation (e.g., the provision of airport services).