Significant job losses and potential threats to the livelihoods of thousands of people in long haul destinations will become a stark reality unless the practice of imposing excessive, discriminatory unilateral taxes on travel to long haul destination are abandoned by certain Eurozone countries said Minister of Tourism, Mr Marthinus van Schalkwyk, today at a media briefing in Berlin.
Speaking at the International Tourism Exchange Berlin (ITB), Minister van Schalkwyk was joined by representatives from other long haul destinations attending ITB Berlin, a leading travel industry convention. Although the meeting was initiated by Minister van Schalkwyk, they all share serious concerns that, just as global tourism arrivals are showing signs of resuscitated growth following the economic recession, arbitrary taxes imposed by certain European countries could adversely affect travel to long haul destinations.
Van Schalkwyk emphasised that it is the right of any country to raise revenue to fund tourism growth, and that many destinations do so through fair, reasonable and transparent levies/taxes. However, what is happening now in some European countries where they discriminate against long haul destinations through so-called “distance banding” and where passenger departure levies are simply of an order of magnitude that defies any sense of fairness, it becomes a problem with global ramifications.
What is also problematic is how it is introduced. Whereas these unilateral taxes were first introduced as a green or environmental tax, it is clear today that it is not reinvested for environmental purposes or green growth in tourism and aviation. One is inevitably left with the impression that it was designed in a way that prioritises fiscal objectives over environmental effectiveness - while presenting the opposite position.
These taxes are expected to add 3 to 5% to ticket prices from these European tourism source markets, with a material adverse impact on passenger numbers and tourism revenue in long haul destinations. The categories of travellers that will be hit hardest are the lower income passengers (where the taxes make up a much larger % of ticket prices), families and long haul passengers.
From a long haul destination perspective, the reality is that there is no practical alternative to flying, whereas short haul travellers in Europe can choose to avoid the burden of extra taxes by resorting to road, rail or ferry.
We argue that these taxes:
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have reached levels that can no longer be regarded as fair and reasonable;
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are discriminatory due to distance banding based on capital cities;
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are ‘trade barriers’/protectionism in another guise;
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stifle development and are prejudicial to thousands of people’s livelihoods in long-haul destinations;
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hit developing countries the hardest; and
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are imposed on precisely the green service exports that give developing countries a comparative advantage.
The meeting commended Minister van Schalkwyk for his initiative in convening the meeting to share views on this matter which has a negative impact on long haul destinations, and urged him to expand the consultative gathering to include other affected destinations.
Enquiries:
Trevor Bloem
Tel: 012 310 3631
Cell: 082 771 6729
E-mail: tbloem@tourism.gov.za
