Tickets prices to go up as govt imposes VAT on air tickets

The government imposing value-added tax (VAT) on air tickets from fiscal year 2023/24 will increase the price of tickets by 6 per cent.

Sources say all companies affiliated with the Airline Operators Association of Nepal are registering themselves on VAT as per government orders.

The government charged 13 per cent as VAT on goods and services. Earlier, VAT was not charged on air tickets. That is why it was not mandatory for companies to register for VAT. Now all companies have to be registered for VAT.

According to Yeti Airlines spokesperson Sudarshan Barteula, the implementation of VAT on air tickets will increase air ticket prices by only 6 per cent.

He believes the price hike will not be significant as the companies can reclaim the VAT paid on the purchase of aviation fuel, office supplies and equipment.

On the other hand, there is still confusion if the VAT should be imposed on international tickets as travel agents believe this will drive away their business as people will choose to buy tickets from intentional agents.



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