Hoteliers seek tax cut for hospitality industry

Hoteliers have sought a cut in value added tax (VAT) for the local hospitality industry to help hotels, resorts and restaurants cushion the pandemic fallout and flourish further.

Comparing the local tariff structure with neighbouring nations, they said tourism in Bangladesh costs higher thanks to the VAT and taxes ranging 15% to 25%.      

"Newly built hotels in India enjoy zero customs duty until the revenues cover the investment," Md Noor Ali, managing director of Unique Hotels & Resorts, said at an event in Dhaka Wednesday.

Claiming India's policy spurred thousands of guest houses there in the past 20 years, he said it seems Bangladeshi hoteliers with the heavy tax burden have built their establishments only to hold milads [prayers during the inauguration].

"We are not able to compete with neighbouring countries due to the uneven tariff structure," he told the programme organised by the Bangladesh International Hotel Association.

Khaled Ur Rahman, managing director of Golden Tulip Hotels, said VAT on restaurants was lowered to 5% from 15% during the pandemic. The tariff has been reverted though we are yet to shake off the losses. 

At the programme, the association handed over the "South Asian Travel Awards" to State Minister for Civil Aviation and Tourism Mahbub Ali. Bangladesh won the award this year in the "Emerging Destination Award Visitors' Choice" category.  

Hotel owners said the health directorate still owes them Tk22 crore in bills as they provided doctors and other on-duty medical personnel with accommodations during the pandemic.

They asked the minister to take measures in clearing the dues immediately. They also pointed out plummeting foreign tourists due to spiralling airfare and complicated visa processing.    

Ease liquor tariffs

At the programme, Noor Ali said a high VAT has been imposed on liquor unnecessarily.

"Ershad sahib [former president Hussain Muhammad Ershad] imposed a 600% tax on liquor, arguing the religious sentiments would go in vain if the prices were too low. But there is no awkward liquor tariff even in Saudi Arabia," he commented.

Khaled Ur Rahman said, "When foreign guests visit Bangladesh, they complain about the non-availability of liquor. Keeping this in mind, arrangements should be made to supply liquor at an affordable price at least for foreigners."

State Minister Mahbub Ali said, "The revenue board can take steps to reduce the VAT tax levied on hotels and liquor. We will push them for our demands time and again."