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Don't Overtax EU Tourism Industry, Warns WTTC

By Ulrika Lomas, Tax-News.com, Brussels

03 August 2012


The World Travel & Tourism Council (WTTC), the lobby group for the travel and tourism industry, has recently written to all EU finance ministers and called on governments to refrain from over-taxing the tourism industry.

The WTTC warns against the temptation of taxing tourism further, which it describes as a “cash cow” in times of debt reduction, arguing that further tax hikes would merely damage the industry.

The WTTC cites four examples to support its statement, saying that there is evidence that the recent UK Air Passenger Duty (APD) rise has cost the UK GBP4.2bn in lost GDP and 91,000 jobs; that the Netherlands was forced to repeal its air departure tax because it has cost EUR1.2bn to the economy despite EUR300m in collected taxes; that Ireland slashed its Air Travel Tax (ATT) from EUR10 to EUR3 per passenger due to a decline in the number of tourists to Ireland by 2m; and that Germany was successful in adding 20% more jobs in the hotel industry during the financial crisis due to its value-added tax cut from 19% to 7% for accommodation services.

In addition, the WTTC called for changes in visa policies to foster tourism, which might create an additional 5m jobs in G20 countries and an additional USD206bn in tourism turnover in three years.

The tourism industry creates directly over 10m jobs in Europe, according to WWTC, more than the financial services industry.

TAGS: tax | air passenger duty (APD) | Ireland | Netherlands | aviation | United Kingdom | travel and tourism | Germany | G20 | European Union (EU) | services | Europe

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