How Pro-Poor and Income Equitable Are Tourism Taxation Policies in a Developing Country? Evidence from a Computable General Equilibrium Model

Abstract

This article highlights the impacts on poverty, income inequality, and the macroeconomic and sectoral output resulting from increases in the value-added tax and sales tax on hotels and restaurants using Indonesia as a case study. While taxing tourism-related sectors was ineffective in reducing poverty and income inequality, using tax revenue from the value-added tax as a cash transfer policy was effective and more so in rural Indonesia. Tax revenue used for infrastructural development was however limited in its impact on poverty and income distribution. Overall, the negative effects of taxation on various industries and the contraction of GDP and employment in the economy need to be mitigated. This can be done with an appropriate policy mix for the use of tax revenue between cash transfers and expenditure in education and health, with the view to address potential resource misallocation and output contraction in other industries.

Does Sun-and-Sea All-Inclusive Tourism Contribute to Poverty Alleviation and/or Income Inequality Reduction? The Case of the Dominican Republic

“…In the first place, the absence of any consensus must be stressed with regard to the method for gauging the impact of tourism on poverty (Mitchell 2012; Mitchell and Ashley 2010), the sources of information, and the best analytic techniques (Medina-Muñoz, Medina-Muñoz, and Gutiérrez-Pérez 2016). Historically, the analysis of the relation between tourism and poverty has been approached using different methodological procedures: (a) simulation models ranging from input–output models to multiregional equilibrium models that take into account all income and all expenditures by the tourism industry (Mahadevan, Amir, and Nugroho 2017; Njoya and Seetaram 2018) and (b) econometric analyses that contemplate temporal series of macroeconomic variables (Balaguer and Cantavella-Jordá 2002; Cárdenas-García, Sánchez-Rivero, and Pulido-Fernández 2015; Lin, Yang, and Li 2018).…”

Regional economic development and tourism: A literature review to highlight future directions for regional tourism research

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Exploring the Tourism-Poverty Alleviation Nexus in the Brics Groupof Nations

“…Tourism is a highly integrative economic activity -contributing to the socioeconomic development of host economies through employment creation, tax base expansion, infrastructure and public resource development, as well as export earnings (Medina-Muñoz et al, 2016a). To this end, tourism is widely associated with the first of the United Nation's Sustainable Development Goals (SDG1) which advocates for the harnessing of socioeconomic mechanisms such as tourism (pro-poor tourism) as a vector for poverty alleviation (Mahadevan, Amir & Nugroho, 2017;Oviedo-García et al, 2019;Scheyvens & Hughes, 2019). Pro-poor tourism (PPT) may be characterised as an approach to tourism development and management where linkages are created between the tourism sector and the poor in order to alleviate poverty and mitigate its effects by changing the distribution of tourism benefits to include the poor (Chok et al, 2007;Strydom, Mangope & Henama, 2019).…”