Cut VAT on tourism to boost growth

One of the big issues in Tanzania at the moment is whether the government will, as it proposes, levy VAT on tourism or whether the industry will persuade the government that this would be a retrograde step. As it happens, it has now been raised as a major issue in the UK as well.

CutTourismVAT, an alliance of two tourism trade associations and two large companies, on 30 July launched its new report on the impact of cutting VAT on tourism. The report argues that a cut in VAT from 20% to 5% on the tourism sector would lead to a £4 bn tax windfall for the Treasury and would lead to growth in GDP of £4 bn as well as creating 120,000 jobs. The report makes persuasive reading – though I don’t expect the politicians to be persuaded.

However, the report and accompanying fact sheet – in reality a policy position paper – are exemplars that other trade associations might like to emulate. The report, by Nevin Associates, is full of figures explaining the costs and the benefits, especially to government. It makes good use of ‘infographics’ to illustrate its key points. The policy position paper is just two pages long, yet manages to squeeze in all the relevant information and, again, makes excellent use of graphics to  illustrate its key arguments.




About David Irwin
David is a consultant in enterprise and economic development. He co-founded one of the UK's first local enterprise agencies, helping new and small businesses, and in 2000 was founder CEO of the UK Government's Small Business Service. He now works mainly in the UK and Africa. In the UK, he focuses on supporting social enterprises. In Africa, he mainly advises on regulatory reform and improving the investment climate through more effective public private dialogue and private sector advocacy.

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