Tourist Taxes Criticized by Industry

April 16, 2012 New Zealand Taxation

Taxes on Tourists CriticizedThe national tourism industry is standing up against proposals by local councils to charge a daily tax on tourists and to demand a fee for entry into national parks.

Over the weekend representatives of the tourism industry of New Zealand voiced their criticism of new proposals by the councils of Auckland and Queenstown to implement new taxes aimed at tourist visitors to the regions. Currently, both the Auckland District Council and the Queenstown Lakes District Council are conducting investigations into the feasibility of implementing a NZD 0.50 tax on tourists staying in the areas. The levy would be collected through the accommodation providers, and would be charged for every night that the person stays in either Christchurch or Auckland.

The chief executive of the Motel Association Michael of New Zealand Baines claimed that the proposed taxes were unfair to tourists and local businesses, and would be “…nothing short of a nightmare to implement and enforce, with potential loopholes across all types of accommodation.”

According to an official submission made to the Auckland City Council by the Tourism Industry Association, the proposed tax would be economically inefficient, would have distortionary effects and would harm the national tourism industry.

The Queenstown Council is also looking at the possibility of levying a small fee for entry into national parks located in the region.

If the taxes are imposed, the revenues raised by the levy in Auckland would be used to fund transportation projects in the city, and the revenues raised in Queenstown would go towards public maintaining facilities and upgrading local walkways and parks.

Photo by Carlos Lorenzo