Smart Taxation
Travel & Tourism contributes to public welfare and supports
government infrastructure that can enable the sector, destinations
and local communities to prosper. However, the sector is
particularly vulnerable to non-productive taxation that essentially
discriminates against travellers and/or travel companies in relation to
goods and services similarly offered in other sectors. To overcome
these challenges and ensure increased revenues for the public purse
as well as a thriving Travel & Tourism sector, the design of taxes and
user charges needs to be based on the following key principles:
equity, fair revenue generation, efficiency, simplicity, and
effective stimulus to growth.
1
Travel Facilitation
Travel facilitation and specifically visa policies are among the most
important governmental policies that influence the development
of international Travel & Tourism. These policies continue to play a
significant role at a time when world leaders look for solutions to
drive job creation, economic growth, and investment promotion.2
Inthe wake of COVID-19, travel facilitation will also require the removal
of travel restrictions, the facilitation of international mobility, and the
implementation of technological solutions to enable a seamless and
safe traveller experience.
In the context of COVID-19, the European
Union implemented strong COVID-19
verification policies to enable a safe and
seamless experience for travellers. What is
more, in 2015, the Indonesian government
introduced a 30-day visa waiver for
the majority of source markets, mostly
replacing its visa on-arrival. The resulting
growth in annual visitor arrivals increased
from 9% in the three years prior to 2015 to
15.5% in 2016 and an estimated 22% in 2017.3
Diversification
As a result of COVID-19, the Travel & Tourism sector evolved,
requiring destinations to employ creativity and agility as they adapt
to the ‘next normal’ and try to bring in new domestic and foreign
investment as well as travellers. While certain destinations will be
able to undertake a few physical or procedural adjustments to
their operations, others will pivot as they address travel restrictions
and newfound travellers concerns of crowds. In this new context,
destinations will need to diversify their product offer and identify
alternative revenue-generating use cases, potentially considering how
technology can offer opportunities for re-invention.
