Budget Watch: Series 12

Nepal is suffering from economic and industrial unrest resulting in deteriorating tourism industry. After the CA election when the CPN-Maoist emerged as the leading party it made public announcements that tourism would be given the status of industry and developed so as to enhance the country's economy. The Maoists should implement their announcements.
The Hotel Association Nepal (HAN) has been urging the government to give top priority to tourism and adhere to political commitment for its development. In this context, the following suggestions are vital for the enhancement of tourism industry as a backbone of Nepal's economy.
* The World Tourism Organisation estimates that every tourist entering a country employs nine persons in that country. This figure is higher in the case of Nepal where tourist reach has penetrated to the village level in many areas. While agriculture retains its premier position as a tool for poverty alleviation, mining and hydropower has great long term potential but needs huge investment whereas tourism has, can and will bring all-round economic development.Given priority, tourism can fuel sustainable economic development and effectively address issues of poverty and unemployment.
* It has a cascade effect as even a farmer is earning by directly selling vegetables or other food items. In the same manner, tourism provides an opportunity to various economic sectors to flourish, such as tea shops, carpet industries, tour operators, rafting, mountaineering, airlines companies and wildlife tourism. It is the only industry which leaves an impact on the people residing in each and every corner of the country. Hotel industry is quite competitive and a sensitive business, therefore there is a need to reduce VAT from 13 per cent to 10 per cent.
* Strengthen Nepal Airlines and immediately purchase two more new aircraft.Treat hotel industry as an industrial sector to let it avail of concessions, like lower electricity tariff. Provide free visa to visitors from SAARC and China for 15 days. Allow more international airlines to operate in Nepal and make airline operations cost effective in terms of fees/charges payable to Civil Aviation Authority of Nepal (CAAN).
* Provide incentives/concessions for innovative tourism products/services. Set no limit on tax-deductible promotion/marketing expenses for tourism. Expedite the building of the second international airport at Lumbini. Bandhs and strikes have tremendously affected this sector.
* The government must ensure a congenial atmosphere and guarantee free movement of tourists.Although, there are many existing tourism destinations in Nepal, product development remains absolutely essential. Promotion and protection of tourism destinations are the need of the hour.
* Despite the government having declared that the open-sky policy would benefit the tourism industry, it has to have real backing to support tourism related businesses. The private sector has to go and demand to see real benefits of the open-sky policy and its implementation. To open doors and boost tourism, international airlines should not be taxed for at least one year to increase the tourism market.
* Establishment of travel/trade desk in Nepali diplomatic missions abroad in collaboration with the Foreign Ministry and Nepal Tourism Board.

Prakash Shrestha,
President,
Hotel Association of Nepal (HAN)