INDEPENDENT NEWS

Tourism sector anxious about proposed border tax

Published: Fri 1 Jun 2018 11:43 AM
Jane Patterson, Political Editor
Tourism and aviation industries are anxious about exactly how the government's proposed border tax will work.
Kelvin Davis Photo: RNZ / Rebekah Parsons-King
Labour campaigned on a $25-a-person tax to raise $75 million a year to help support tourism infrastructure strained by huge numbers of tourists.
New Zealand has experienced a boom in visitor numbers. With a forecast of 4.8 million a year expected by 2023, that shows no sign of abating.
Tourism minister Kelvin Davis refused to include a bed tax in plans but said more money needed to be raised to pay for infrastructure.
"It's not as a straight forward as it sounds, just collecting money off tourists. But the big thing is it goes to the communities most affected by it.
"So it's important that those people who benefit from any infrastructure are the ones that actually pay for it."
He gave no details about exactly how the tax would be administered, except that it would not apply to New Zealanders.
Official papers obtained by RNZ detail the challenges with collecting the tax, deciding who it should apply to, and making sure the right people are taxed.
Tourism Industry Aotearoa chief executive Chris Roberts said a bed tax should have remained on the table.
"What we understand about the design of the border tax is it's intended to exclude New Zealand passports holders, New Zealand residents, will possibly exclude Australians and Pacific Islanders, so it's starting to get extremely complex."
Board of Airlines Representatives New Zealand executive director Justin Tighe-Umbers said international airlines had red-flagged the tax because of the possibility they would have to collect it.
"They simply don't have the information to identify residency status, visa status, things like the purpose of visitors coming to New Zealand.
"So potentially, New Zealanders who've bought their ticket using an overseas website, for example, could get caught up."
Aviation New Zealand chief executive John Nicholson said many of its tourist flight operator members were worried the tax could discourage people from coming to New Zealand.
"The big concern from them is if the tap is turned off and demand for tourism starts declining."
National Party tourism spokesperson Todd McClay said the government was bound by its pre-election promise.
"He [Mr Davis] said there would be a levy on foreign visitors to New Zealand and he'll probably have to go against the advice of his officials to deliver this because the government won't want to break another promise."
The specific details of how the tax will work will be released in the next few weeks. The government is also expected to announce a new regime for some of the Great Walks, under which overseas people would be charged higher fees.
RNZ
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