Tax reforms are needed to unlock the region's potential

Progress towards tax reforms, which ease burdens on tourism, travel services companies and consumers, was made in discussions among delegates of the 45th APEC Tourism Working Group Meeting in Macao.

The reform project was initiated by the Philippines in 2013 and co-sponsored by South Korea and Mexico. It aims to analyze taxation strategies that maximize the competitiveness of destinations by providing a holistic and comparative assessment of tax polices and degrees of impact on the travel industry, including both tourists and businesses.

The pursuit is part of broader efforts to advance service trade in the Asia-Pacific region.

Currently the project is carrying out empirical assessments and it is expected to be some time before a full report is completed.

Javier Esteban Guillermo Molina, head of the TWG, said the goal of the reforms were to determine how to achieve more transparent, fair and equitable tax regimes to reduce barriers to tourism development.

Molina noted that a one-size-fits-all approach was unsuitable given the diversity of the region's taxation systems and tourism sectors.

Delegates at the TWG agreed that the competitiveness of destinations at the inter-regional and international tourism level were significantly influenced by taxation policies.

The majority of them showed great interest to get involved.

According to World Travel and Tourism Council data, APEC's 21 member economies welcomed 355 million international tourists in 2013, propelling an industry that employs about 125 million people.

Tourism is expected to deliver more than 650 billion dollars ($1.05 trillion) to the APEC region's economy in 2016. Member economies could gain up to 57 million additional international tourism arrivals by that time.

This could create 2.6 million new jobs, based on the adoption of policy changes in areas such as taxation, the World Tourism Organization reported.

"Lifting impediments on service providers, including opaque taxation regimes and unnecessary costs that are ultimately passed on to consumers, is needed to unlock the region's market potential. APEC economies are now working actively to address this," said Peru's Foreign Trade and Tourism Minister Magali Silva Velarde-Alvarez, in May.