EU Hits Out At US Plan To Tax Travel Permits

by Ulrika Lomas, Tax-News.com, Brussels

14 September 2009

The US Congress is considering a USD10 fee on the Electronic System for Travel Authorization (ESTA), the collections from which would be ploughed back into the US tourist sector.

It is proposed that, under the new Travel Promotion Act, the fee would be utilized to pay for tourist promotional campaigns and publicity. It is hoped that the funds would help to fight the downturn in visitors to the US, with a resultant increase to employment in the tourist sector. The fee could be in place by the end of September this year.

ESTA applies to travelers to the US from countries that have been given exemptions from visa requirements within the Visa Waiver Program (VWP). Under ESTA, regulations have been imposed which require tourists traveling under the VWP to register on-line at least three days before their entry date to the US, and to renew that registration every two years. VWP countries include those within the European Union, Australia, New Zealand, South Korea, Singapore, Switzerland, and Brunei.

The proposed registration fee has, however, received criticism from the travel industry in those countries that had, up to this point, not considered ESTA as a visa substitute. One EU spokesman was reported as saying that, if the fee were to be introduced, the EU’s attitude to ESTA would need to be reviewed. One fear is that, once a fee has been introduced, it could be increased at any time in the future.

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