Tourism entrepreneurs have urged the government to remove the value-added tax (VAT) on air tickets, citing its negative impact on the tourism sector.

During an interaction organized by the Nepal Association of Tour and Travel Agents (NATTA) on Thursday, stakeholders argued that ticket prices have increased due to VAT, discouraging foreign tourists from visiting Nepal.

Manoj Karki, chairperson of the Airlines Operators Association of Nepal, stated that the tax has not only affected airlines but also burdened passengers with higher fares, ultimately harming the tourism industry.

Thakur Raj Pandey, senior vice president of the Nepal Mountaineering Association, emphasized the need to revise tourism-related taxes, including those in the aviation sector, in the next fiscal year’s budget.

Former NATTA president Madhu Acharya suggested the government explore alternatives to VAT, pointing out that India imposes a lower tax rate—5% on domestic flights and 12% on business class tickets. He linked high ticket costs to a decline in foreign tourist arrivals.

Sangharsha Bista, president of the Restaurant and Bar Association of Nepal (REBAN), claimed that VAT has not fostered a business-friendly environment and has negatively impacted the overall industry.

The government introduced VAT on air tickets through the budget for the current fiscal year 2024/25. -- RSS