19 Aug 2008

Tour operators seek minister's help over tax bill

9:40 pm on 19 August 2008

The Inbound Tour Operators Council is seeking support from Tourism Minister Damien O'Connor to clarify an unexpected tax bill that it says may be as much as $30 million.

The council says the Inland Revenue Department is seeking the back taxes, instead of honouring the GST deal it signed with the industry.

Council president Brian Henderson says his members are appalled at the conduct of the tax department which, in 2001, agreed to zero-rated fees for overseas wholesalers arranging tours.

At a recent meeting, tax department bosses reportedly told the council they made an error and will no longer honour the agreement.

Mr Henderson says the "unjust and outrageous" situation will cost jobs and send some operators overseas.

The department says many of the larger inbound tour operators do pay GST, and zero-rating is far from an industry-wide practice.

It says the advice it gave the industry in 2001 was informal, and it has the discretion to change its position.

Furthermore, it estimates the amount of money owed is considerably less than the $30 million claimed by the Inbound Tourism Operators Council.