How will tax incentives affect tourism development?
Economy04 December 2019, 15:21 87
According to experts, the decline in prices will directly impact customer satisfaction and product sales
The development of tourism has been one of the priority goals in recent years. The care and attention given to this area are growing day by day. As a result, we see that the flow of tourists to the country is growing year by year. But there are more ambitious goals ahead. We have many tasks to accomplish if we want Azerbaijan to be recognized as a tourism destination all over the world. One of them is the application of tax incentives, which are very important for entrepreneurs.
The rules of e-services provided by the State Tourism Agency were developed and submitted to the relevant government agencies, Chief of Staff at Azerbaijan's State Tourism Agency Kanan Gasimov said at the Azerbaijan Tourism Summit, Trend reports. According to him, these rules are expected to be approved in the near future. Gasimov added that issues on tax reform in the tourism industry were agreed upon by government agencies. "From next year, members of the tourism industry will sense this in their activities. Discussions, on the establishment of tourist assistance centers in Azerbaijan, have been completed. The implementation of this issue will begin next year,” he said.
But what areas of tourism will these tax incentives cover, and what will it accomplish?
According to expert Rahman Safarov, applying tax incentives is a positive step to develop the tourism industry. "In this regard, we can take Turkey’s experience as an example. In 1990-95, the tourism sector in the fraternal country was exempted from tax. Different steps are being taken to develop this field in Azerbaijan as well. For example, a few years ago, licenses were eliminated. Various tax incentives should now be applied so that small business can continue to operate. This is an important milestone for the growth of economic-type hotels. I think that certain tax benefits could have a positive impact on the tourist flow to the country, along with the development of this sector. Many countries, including France and Spain, apply such concessions. Tourism is one of the competitive fields. We also need to make some changes. In particular, the application of such incentives to the priority segments of tourism is an important issue. This way, we can reach our goals faster. We can achieve positive results if we apply tax incentives to various sanatoriums and other health tourism facilities,” he said.
Head of the "Luna Travel” Company Rahman Guliyev said applying incentives to tourism is a very important decision. "This decision is long overdue. I think this decision will still be the biggest supporter of the steps taken in this area thus far. The introduction of tax incentives will have a significant impact on price policy in tourism, which means that tourists will be satisfied with the service. The decrease in prices is a factor that has a direct impact on customer satisfaction and product sales. As prices go down, we will see the sector develop even more,” he said.
Tourism expert Jeyhun Ashurov noted that the use of tax incentives in this area is one of the most discussed issues. "Indeed, the sector needs certain concessions and incentives. This decision will also lead to an increase in the number of business entities operating in the tourism industry. At the same time, tax incentives can lead to a more dynamic development of tourism. Tax incentives are encouraging. In particular, in the regions, such concessions or tax exemptions can attract more business entities in a short period of time. Most of the neighboring countries use this experience extensively. For example, Turkey and Georgia are a good example. The Georgian tourism industry is at the forefront of our eyes. The potential tourist areas there were exempt from taxation for up to 10 years or tax concessions were applied. Infrastructure formed in these areas, and new businesses, were built, which attracted major investments. Investors and businessmen also brought a new way of governing with them to take advantage of these benefits. Innovations and advanced practices are also encouraged. Thus, they promote these areas as major touristic zones. In this context, I can say that the areas and fields we most want to develop need such tax incentives. These concessions will lead to the revitalization of the sector and the acceleration of economic dynamics. Azerbaijan should benefit from international experience. I think this would be more advantageous for the construction of facilities with big investment capacity. Hotels are one of the main conditions here. In addition to the large hotel complexes, there is a need for the construction of economic-type hotels. Taking advantage of these concessions will soon lead to positive results,” he said.
First in CIS, second on global scale – Azerbaijan has leading positions in terms of access to electricity