reprinted from:
Travel agents call for no VAT on foreign tourists' hotel bills
Copyright 2002
The Korea Herald The Korea Association of Travel Agents (KATA) yesterday called on the government to continue to exempt foreign tourists' hotel bills from a 10 percent value-added tax (VAT). The request came after the Ministry of Finance and Economy announced early this month that it will start levying the value-added tax on such bills again starting July next year. In a letter sent to the finance ministry and other related ministries, KATA said the government should extend the expire date of the value- added tax exemption for foreign tourists in order to support local tourist hotels. "Imposing the value-added tax again is to ignore the difficult business situation of the local tourist hotel industry," the association said. "The government should wait to impose such a tax until the local tourism industry matures enough." The association said the revival of value-added tax on foreign tourists' hotel bills will lead to a rise in hotel room charges, which in turn will discourage foreign tourists from visiting Korea, thus widening the travel account deficit. Choi Kyung-soo, the chief of the finance ministry's Tax and Customs Office, however, said that the government cannot accept KATA's request. "It is impossible," Choi said. "It is not fair to do so for other industries in a similar situation." The finance ministry originally planned to provide the value-added tax exemption on foreign tourists' hotel bills for a period of two-years, until the end of this year, but changed its plan to provide it until the end of June next year due to strong opposition from the local hotel industry. Currently, about 457 tourist hotels across
the country receive the benefit of such tax exemption. |
