GST increase will penalise inbound tour operators, says ITOC

10/02/10

Inbound tour operators are the only exporters to be penalised by the proposed increase in GST as proposed by Prime Minister John Key in his statement to Parliament yesterday, Inbound Tour Operators Council of New Zealand (ITOC) Paul Yeo says in a media release.

“While applauding the general direction of tax reforms and Mr Key’s acknowledgement of tourism as a key export industry ITOC is concerned that many of our members will relocate overseas or close down as they will find it increasingly difficult to compete with offshore tour operators,” Yeo says.

“Unlike other businesses that can zero rate GST for their exported services inbound tour operators are not able to do so. A tour operator based in Australia can package New Zealand and avoid paying GST on their fees giving them a significant and unfair price advantage.”

ITOC has raised the issue of competitiveness with the Prime Minister, who is also Minister of Tourism and will do so again.

“We will be doubly impacted if insufficient notice of any GST increase is given as our prices to overseas buyers are contractually locked into place up to two years ahead. We’ll simply have to absorb the increase on our charges which will hit us hard. “

ITOC Background:The Inbound Tour Operators Council of NZ was founded in 1971. It represents 250 tour operators and suppliers throughout the country who package, distribute and market New Zealand tourism products and services internationally.