Gov’t has a choice: Either to kill tourism industry or revive it for the greater good of the country

The government of The Gambia’s recent proposal to increase the departure / arrival tax from $20 to $25 as proposed in this letter reference AVJ 27/09/02.PART 21/ (53) of 13^th May 2024 addressed to operators.

This proposal has raised shock waves in the sector which has warrant me to ask, “If Government of The Gambia wants to kill the goose that lays the golden egg”?

No doubt they have held back with the proposed increase until further notice.

The challenges highlighted in a recently concluded study on the tourism industry in Gambia have identified the following challenges:

1.Lack of destination recognition/attractiveness

1. Dwindling product quality
2. Undiversified products and source markets
3. Limited air access
4. Over reliance on International Tour Operators (ITOs)
5. Climate change and environmental degradation affecting the country product
6. Weak Statistical Base to inform policymakers among others.

The outcry of stakeholders over the past five years has been the poor performance of the sector which has been seriously affected by the withdrawal of Thomas Cook, advent of Covid 19 and the controversial introduction of theairport arrival and departure tax which has virtually paralyzed the sector recently.

The sector has been grappling withserious challenges of QUALITY BEDS that are attractive to the clientele. Let’s remember that most of the hotel operators affected are cash strapped to undertake the necessary renovation to upgrade their standards. The seasonality of the industry with short seasons is another impediment.  It was suggested before the OIC that the investment in the 419 so call Radisson Blue 5-starHotel would have taken care of necessary renovation to meetup the quality beds needed for the conference. However, this expectation fell through, and the rest is a sad history.

The sorry indebtedness of most of our hotels does not stop with the commercial banks butconcernsalso the Municipalities. At one point a couple of hotels were placed under the hammer at the behest of the KMC for default in settlement of rates. However,it is only after the timely intervention of The Director General of The Gambia Tourism Board who appealed to the courts to convince them that this would paint a bad picture of the industry if the sales went through. The Director General and the Ministry did not know of the sale until I broke the news to them.

My intention in this article is to demonstrate that all is not well with thetourism sector and the sector should not beregarded as a milking cow with no palliatives and actions put in place to promote this very important activity. Government therefore should not kill the goose that lays the golden egg.

If we consider the tourism sector and its contribution in the overall economy of the country both in employment, revenue generation, foreign exchange earnings and above all the linkages with the agricultural sector, the contributions are huge and should be taken seriously.

This present article is to highlight the key sometimesself-inflicted harm thatgovernment is causing to the industry. The “Maatey” policies “in raising taxes randomly without due consultation with other associated Ministries and sector partners, does not help, on the contrary, it will kill the sector

Government‘s decision conveyed in the letter referenced.

AVJ 27/0902/PART 2/ (53} dated13^TH May 2024, captioned“INCREASE OF SECURITY FEE FOR THE PROVISION OF CIVIL AVIATION SECURITY SYSTEM” has opened a can of worms in the tourism industry that we are all grappling with up to the present time.

I would venture to proffer the following comments regarding this untimely action:

1. The content of the letter addressed to Operators and Airlines states among others that as from 1^st July, the Airport Tax will be increased from 1^st July 2024 to $ 25.
2. Oddly enough, the letter of instructionsaddressed to the Operators was not discussed or copied to the appropriate Ministry - the Ministryof Tourism& Culture nor was it communicated or The Gambia Tourism Board.
3. We wonder whether the Civil Aviation Authority operating under the Ministry of Works and (championing the increase) is working for same government? It seems the left does not know what the right hand is doing in the case of this bombshell. It is indeed sad to see this happening currently in which
   proper administrative procedures and analysis, and consultations precede were   ultimate decision-makingprior actions taken.
4. The institution of the payment the $20 was still controversial and has led to the withdrawal of many tour operators especially the Nodic group which are one of the most loyal and constant operators who pay well, and the group was one of the bigger operators remaining in our destination.
5. The standpoint of stakeholdersis that they are not against an increase, but the timing is wrong. It should come when the sector has recovered or recovering. The guidelines of IATA and ICAOclearly spelt out what needs to be done in the caseof plans to increase taxes.
6. The most important observation is as follows: The civil Aviation Authority letter Ref : AVJ 27/0902/PART 2/ (53} dated 13^TH May 2024 addressed to SN Brussels is requesting them to seek approval from IATA to include the charges in their tickets and get a security code for it .This clearly does not make sense to me as the original letter Ref AVB 145/176/01 (75) of 29^th March 2023 was addressed to AITA seeking direct clearance .

I am adding a few important notes from IATA & ICAO worth considering and use in any submission to be made.

-IATA’s activities include:

Ensuring that new and existing taxation measures are fairly applied and adequately consider the economic and social ramifications

• Advocating against measures that result in double taxation
• Advocating against taxation measures that unjustly target the industry, where the resulting tax revenues are not reinvested in air transport related services and infrastructure.
• The International Civil Aviation Organization (ICAO) position on governments taxing aviation
• Over the years, the ICAO Council has undergone a number of revisions to the policies on taxation of international air transport, and has adopted a consolidation Council Resolution: ICAO's Policies in the Field of Air Transport (Doc 8632, 3rd Edition, 2000).
• Doc 8632 makes a conceptual distinction between a charge and a tax: i) a charge is a levy that is designed and applied specifically to recover the costs of providing facilities and services for civil aviation; and “a tax is a levy that is designed to raise national or local government revenues which are generally not applied to civil aviation in their entirety or on a cost-specific basis”.
• Considering that the recommendations in the ICAO policies have been developed by major international conferences, there is a strong moral obligation for all ICAO Member States to ensure that any imposed taxes and charges conform to the policies and philosophy set out in the ICAO policies. Therefore, ICAO Member States are also urged to avoid imposing discriminatory taxes on international aviation, as well as avoid double taxation in the field of air transport.
• Ticket Taxes – Best Practices
• Since the 1980s, many governments have required the airline industry to collect taxes, fees, and charges from consumers on their behalf. These amounts have increased from less than USD 1 billion annually to more than USD 64 billion today, resulting in significant administrative and financial burdens for the airline industry and higher costs for consumers.

• ICAO has long expressed concern regarding the proliferation of inefficient and burdensome taxes on air tickets that not only increase the cost of air travel, but equally create a negative economic impact on the sustainable development of air transport and the protection of the customer. Ticket taxes imposed on passengers by governments or other charging authorities may reduce the demand for air travel, which is highly sensitive to price changes. This, in turn, will hamper economic growth. IATA has compiled the official airline industry recommended processes for taxes and charges, and best practices on dealing with governments and authorities. (Source IATA &ICAO).

We must assess whether the services and facilities our airport currently offers that can warrant any tax increase at all. With all due respect to the renovation of the airport, the standard of facilities and services have left much to be desired with all the amounts spent.

Our current market situation does not need an increase in taxes, but we should instead try to possibly freeze our taxes for a year or two to attract investment in air access. Increase in taxes we all agree is a must but the timing of the taxes and the utilization of it is key as referred to by AITA. These notes and guidance are key in any airport operations. It seems our airport operators have not given particular attention to this important recommendation even though they are signatories to the Banjul accord. 

To be cont…

Sheikh Tejan Nyang

The Author of this article is a former Director of Tourism, Co-founder /Co Proprietor and Head of School of the Institute of Travel & Tourism of The Gambia and a TourismConsultant.