TOAB demands the exemption of the tourism industry from VAT

The Tour Operators Association of Bangladesh (TOAB), the country’s apex tourism body, has demanded the withdrawal of the 15 per cent value added tax (VAT) imposed on tour operators in the FY25 budget proposal.

TOAB president Md Rafeuzzaman made the call during a press conference organized by tour operators on the budget response held at the Nasrul Hamid Auditorium at the Dhaka Reporters Unity on Tuesday.

Rafeuzzaman added: “Tour operators bring together tourism elements from various sectors and create packages that provide tourists with a convenient and comfortable travel experience.

“VAT is charged when renting a hotel room, purchasing a transport ticket, paying the bill for meals in a restaurant, and purchasing tickets to various tourist attractions and amusement parks. This even applies to other travel services. Tour operators provide services to tourists by combining all the above-mentioned elements of tourism.

He further noted: “If VAT is applied to tourism elements, they will be added up in a combined package and the package price and travel costs will increase significantly. As a result, the entire tourism industry, especially inbound and domestic tourism, will be seriously affected.

“Since the tourism industry is vast and multi-sectoral, withdrawing existing VAT facilities may hamper the development of a thriving tourism industry in Bangladesh.”

Mentioning that about 4 million people are directly and indirectly involved in the country’s tourism sector, the TOAB chairman said, “Our tourism industry is an export product and 90 percent is private sector investment.

“People in other sectors get different incentives to export, but we don’t. In such circumstances, the imposition of VAT on tour organization services will cause significant disruption to the tourism sector. Additionally, the tourism industry can both earn and save hard-earned currency through tour operators, which could also be disrupted.”

TOAB vice president, secretary, directors, advisors, honorary members and journalists from print and electronic media were present at the press conference.