Tourism Fallout May Spur Tax Reductions

Tourism officials Thursday expressed optimism that the recent industry downturn caused by fears of severe acute respiratory syndrome could be lessened by the adoption of tax-reduction policies for private businesses and the tourism sector.

The Ministry of Tourism is working with members of the private sector who want the government to ease the impact of SARS by reducing landing taxes at Phnom Penh International and Siem Reap airports, air traffic control fees, tickets fees at Angkor Wat and by making taxes defer­rable, Tourism Minister Veng Sereyvuth said. “The decision is close to be being made.”

Many service companies here have been affected by Asia’s tourism crisis following the SARS outbreak, even though Cambodia has yet to report a positive case of the disease.

Companies most affected have been hotels, airlines, travel agencies and airports, Veng Serey­vuth said. Hundreds of employees have been laid off since March, and some companies have closed their doors entirely, he said.

“If the private sector is healthy, the government will be healthy too,” he said. The entire economy benefits from the taxes paid by companies in the tourism industry, Veng Serey­vuth said.

Santi Laonikakra, Siem Reap Airways general manager and acting president of the Airlines Asso­ciation, said his group is working very closely with the Tourism Ministry to help ease the effects of the current crisis.

“We are working as a team to find out a positive solution together,” Santi Laonikakra said. “We need the government to support us; otherwise, we will both lose revenue.”

Tek Ket, acting president of the Phnom Penh Hotels Association, said his association sent a request to the Ministry of Finance earlier this month, requesting that the value-added tax be reduced from 10 percent to 5 percent.

“I hope the government will not stand and see us close down our doors,” he said. “If there is no solution now, our businesses will be gone in the next three months.”

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