The International Air Transport Association (IATA) says the tourism tax is at odds with accepted international policies on taxation published by the International Civil Aviation Organization (ICAO), which does not support taxes on aviation that do not generate funds which will be put back into aviation related activities.

‘We strongly oppose any form of tax or fee where the resulting revenue is not reinvested in aviation services,’ said Vinoop Goel, IATA’s Regional Director for Member and External Relations, in a position paper submitted to New Zealand’s transport and tourism ministers.

IATA also say the tax will significantly threaten New Zealand’s tourist industry. ‘Aviation is a catalyst for economic growth. Making air travel more expensive through the tourism tax could reduce international passenger numbers to New Zealand by 78,000 annually. This could result in a NZ$100 million negative impact on the GDP and a loss of 1,200 jobs,’ said Goel.

According on data from the World Travel and Tourism Council, New Zealand’s travel and tourism sector contributed 17.5% of New Zealand’s GDP and over 580,000 jobs. By 2027, these are expected to rise to 18.2% of GDP and 712,000 jobs.

IATA said that should the government decide to proceed with the tourism tax, the authorities should take direct responsibility for its collection. Goal said: ‘The proposed tax calls for New Zealand citizens and residents be exempt from the tax. However, such exemptions cannot be automated when tickets are purchased. It would be an administrative burden, cost and nightmare as airlines would have to process it manually. The practical approach is for the authorities to collect the tax themselves on arrival or departure so that the applicable exemptions are granted accurately.’

Report by Rob Munro