International tourists to pay new $35 visitor levy

Thursday, 27 September 2018

The tourism industry says there's a few holes in plans for a new visitor levy.

Cabinet's approval of new $35 a visitor levy will raise an estimated $80 million a year to pay for tourism infrastructure and conservation projects, but the move is unlikely to satisfy demands for further funding.

Tourism Minister Kelvin Davis confirmed the international visitor levy (IVL) to be introduced in the middle of next year would be collected through visa fees and a new electronic travel authority, with the money evenly split between tourism and conservation.

About 2.3m international visitors entering New Zealand for 12 months or less will have to pay the new charge, with exemptions for certain countries, including Australia, our largest visitor market.

Davis said the Government would work with conservation, local government and tourism industry groups to decide the best way to spend the levy proceeds.

* Prepare for a lolly scramble over new visitor levy money

* Tourists could be taxed to enter New Zealand under new proposal

* Tourism industry wants a say on how a new visitor levy will be spent**

Tourism Industry Aotearoa chief executive Chris Roberts said priority needed to go to projects that benefited both local communities and visitors.

A commitment not to raise the levy for five years was welcomed, as was the decision to exempt crews on aircraft and cruise ships.

Roberts said the Government already collected $3.3b in taxes from international visitors, and any consideration of further levies or taxes to pay for tourism infrastructure should wait until after the Productivity Commission completed its report on local government funding next year.

Popular tourist areas such as Aoraki Mt Cook are likely to be in line for funds from a new visitor levy.

'We don't want tax after tax added to the system.'

However, Regional Tourism New Zealand, which represents 30 regional tourism marketing organisations, does not believe the new visitor levy will be sufficient.

Chief executive Charlie Ives said they favoured giving the entire $80m to conservation.

'Any money is welcome, but if it's split between tourism and conservation, it's not going to be as effective.'

Queenstown's winter festival drags in the crowds, but mayor Jim Boult says they need more financial help to cope with the pressure of tourism.

Ives said they still wanted regional visitor levies, either in the form of bed taxes or through charges at popular tourism spots, so councils did not have to rely so heavily on centralised contestable funds that were difficult and time consuming to access.

Local Government New Zealand has also called for local tourist levies to relieve the burden on ratepayers stuck with paying for tourism-related facilities.

Queenstown mayor Jim Boult is an outspoken proponent of bed taxes and said the new visitor levy would not solve Queenstown's problems.

'On a really good day we might get a couple of million dollars out of it.

'We're trying to build a house and they're paying for the wallpaper, so that's not going to work.'

Boult said he wanted a solution to the fact that Queenstown ratepayers were paying for the upkeep on New Zealand's largest industry.

'At this stage we have seen no better model than a bed tax, but I'm open to any other sensible suggestions.'

Getting the online electronic travel authority (ETA) up and running in time would also be a major challenge according to Roberts who said he understood there would be a 'soft' launch at the beginning on July, with it becoming compulsory from 1 October next year.

'Both those time lines feel quite challenging in terms of creating a computer system that can handle a couple of million enquiries a year and decide who's approved and who's not.

'There is only one other border tax in the world where locals are exempt, and that's in Mexico, and there's certainly no other system where there's so many exemptions.

'More than 1.5m visitors a year will not be paying this because its exempting Australians, Pacific Islanders, business visa holders … so it's quite unique in a global context,' Roberts said.