We are disappointed at the national Budget presented by the federal Finance Minister. The Economic Survey preceding his presentation carried what can be called a passing mention of Tourism and the long Budget speech contained not even that.
A democratic government faced with its own version that more than 40% citizens are living below the poverty line, should have taken as imperative to adopt Visitor Economy, If only for employment generation.
The finance minister and his team have obviously laboured from a tunnel vision, striking only at the visible – the captive – sources of tax revenue.
According to a survey of travel cost per 100km, Pakistan ranked 64 among the 80 countries in 2017, with an average flight cost of $23.70 compare to Malaysia with $4.18 per 100km-Is The Cheapest. In 2016 Pakistan was ranked 20, which means that the travel cost has increased steeply in a year. India ranked third in travel cost, which averages $4.96 per 100km of travel and the travel cost per 100km in Turkey is $6.28.
It was expected that to our Travel sector, selective reduction will be made on airline tickets to support the growing domestic tourism industry but with several ifs and buts for rate calculation and the voices raised in the favor of that step have been disdained despite democratic pretensions.
To our hospitality sector, which continues to suffer financial and volume losses from the aftermath of 9/11 aftermath, the Budget, as was expected didn’t reduced or remove the Cess levied last year – and disfavored by the Judiciary – on fuel gas supplied to hotels.
This, when actually it should have provided tax relief on sales and tariff cuts on utilities or even a subsidy to the high costs of their security apparatus, which really is the State responsibility.
While we endorse the appeal made by the Pakistan Hotels Association in this regard, we have serious concerns at the trend inherent in the institution of this Cess; it may replace the recognized process of corporations floating new/additional shares to finance their infrastructure development.
A Cess is an imposition upon direct beneficiaries, by non-commercial state agencies, for providing facilities required for them and not by all citizens, thus precluding justification of additional tax. But here is a private sector enterprise which should be investing its own capital to further develop its infrastructure from which it will itself reap more profit.
This Cess and the air Travel taxes are needed to be reduced to grow the under pressure tourism industry.§
