Bhutan is a welcoming, mountainous country visited by a multitude of tourists every year. For this reason, the government has put in place a number of measures to ensure the smooth running of the industry in the region. These include the payment of taxes by visitors. A press release issued on June 29, 2022 announced an increase in this tax. Here's what you need to know about this change.
Reasons for the government's decision
Whatever the country, every government decision is always taken for a specific reason. This is also true of tax increase for tourists in Bhutan. This decision was taken to improve tourism and make it even more attractive. It will also limit the number of visitors without affecting the country financially.
In addition to these reasons, there is the reducing air pollution and all the other pollution associated with tourism. Indeed, the more visitors there are, the more pollution is accentuated. That said, by controlling the number of people who come to the region for tourism, this problem can also be controlled. It's important to protect the country's ecology and the well-being of planet Earth.
Does raising taxes benefit tourists?
A tax increase is bound to be a disadvantage for some people. Before setting off from the country where they live, tourists have to budget for their stay. With the tax increase, this budget will now be very high. But not everyone can afford it.
On the other hand, other people wouldn't mind. Whatever the cost of their visit, they're willing to pay it. And that's who the government is counting on to ensure the viability of this sector.
Over time, people who are unable to comply with this law may end up doing so. They'll just need time to readjust their budget or get used to the situation. In the worst case, they may choose another destination for the visit.
Consequences of higher taxes
The first consequence of this new law in Bhutan will be a significant drop in visitor numbers, especially in the first few years following the change. This will have a direct impact on the country's total earnings in the sector. Apart from these consequences, those working in the field will also be affected.
Long before this decision was taken, the number of employees in the sector was around 50,000. This number will also fall, because if visitor numbers drop, some positions will become redundant. As a result, those who occupy them will be laid off.
All in all, the tax increase for tourists in Bhutan is designed to improve the tourism sector. It also helps limit pollution from the sector. However, the decision also has significant consequences.
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