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High taxes affect tourism, hospitality business in Goa

High taxation is taking a toll on Goa’s tourism sector, according to travel trade experts in the state. Manguirish Pai Raikar, Vice President, Goa Chamber of Commerce and Industry (GCCI), said recently at a press conference held in Panaji that taxes have to be rationalised if Goa has to be promoted as a long haul ‘winter destination.’ “Goa gets around Rs 1,500 crore of revenue from tourism and the tourism sector accounts for 32 per cent of the Gross Domestic Product (GDP). Tourism players have to pay 12.5 per cent VAT on food and beverage and 20 per cent VAT on alcohol, leading to higher pricing. In comparison, taxes in Sri Lanka are negligible,” said Raikar.

According to Ralph de Sousa, Honorary Secretary and Chairman, GCCI Tourism Committee and President, Travel and Tourism Association of Goa, “Local and state taxes amounted to almost 43 per cent, which along with central taxes cost industry stake holders almost 52 per cent. In many countries, taxes do not cross 18 per cent, for example countries in South East Asia.” de Sousa said that there has been a fall in bookings by corporates by almost 15 to 20 per cent. Executives are cutting down on travelling and also the number of conferences has seen a drop.

“Domestic flights to Goa have reduced by 25 per cent, probably due to high costs. Industrial growth has also decreased from 16 per cent to seven per cent. Travel operators have levied a surcharge of Pounds 60 due to rising air fuel costs. To compound things, the visa process from UK to India, which was quicker earlier has now been outsourced and takes longer. There has also been a 15 to 20 per cent drop in room occupancy during the off-season,” added de Sousa.

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