Ministry of Tourism (MoT) has contacted Central Board of Revenue (CBR) to rationalise taxation structure pertaining to hotels/travel agents to promote tourism industry in the country, sources told Business Recorder here on Wednesday.
Ministry of Tourism's task force has demanded of the government to curtail the number of taxes on the hotel industry for encouraging investment in the hotel sector.
In this connection, the 4th meeting of Task Force Committee will take place on February 21 in the Ministry of Tourism, Islamabad.
Sources said that the committee has recommended to the government to abolish hotel licence fee, TV licence fee on each TV set in a hotel room and State Bank Foreign Currency Dealers Licence fee as hotels are foreign exchange earners, but do not sell foreign exchange.
Moreover, provincial bed tax should be abolished in Sindh, Punjab and Balochistan, as it is not applicable in NWFP and Islamabad. Sindh and Punjab are charging provincial bed tax as 'capacity tax' irrespective of bed occupancy in hotels.
According to another proposal, entertainment duty payable to provincial governments by hotels be abolished. It is paid on arranging function/show for provision of entertainment.
The committee has also identified various federal/provincial taxes which did not yield substantial revenue but are irritants to the hotel industry like wireless licence fee, cable operator fee and radio licence fee, etc.
Task Force further suggested retention of income tax, corporate tax, conservancy/water tax, education cess and demanded rationalisation of general sales tax (GST) and customs duty for the hotel industry.
On the issue of travel agents, it has been recommended that airport tax be rationalised and only one minimum amount be charged on international/domestic class, first class, business class, economy class.
Sources added that it is expected that senior tax officials along with other relevant departments will participate in the meeting.
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