Investor Presentaiton
FINANCING SUSTAINABLE TOURISM IN KHYBER PAKHTUNKHWA
The objective of this policy note is to give a
preliminary assessment of the viability of
tourism related tax revenue hypothecation or
ring fencing for sustainable tourism
development in KP. For this purpose, a survey of
international best practice, current structure of
tourism and taxes and a stakeholder analysis
was conducted. The most important and
relevant findings, recommended policy
interventions and areas of further research are
summarized below. The tourism sector in KP
promises significant economic gains both for
the local community and the country at large
and hence it is imperative to maximize
this potential. Implementation of the pro-
posed recommendations can facilitate the
development of a locally financed model for
sustainable tourism in KP.
A summary of the key recommendations and
proposed way forward is presented in the table
below.
Key
Recommendations
Challenge-
Lack of Private-sector Stakeholder
Engagement with Development
Authorities. and effectiveness of
development authorities in terms of
sustainable tourism development.
Purview
Development Authorities
Time Frame Medium-term
Objective.
This will ensure that the decision-making process of spending locally collected revenues by the
respective authorities is more democratic and less ad hoc. It will create stakes for the private sector
and the local community in the authority, increasing willingness to pay taxes and fees etc. for
specific projects and services.
A comprehensive institutional assessment of the development authorities would highlight the
underlying organizational issues and weaknesses. An institutional review that leads to reform and
restructuring can potentially improve future service delivery and management of tourism related
activities.
Viability
High
Solution/Intervention.
Institutionalizing stakeholder and community voice into the structure of the tourism and development
authorities.
Moreover, as the revenue and expenditure jurisdiction of development authorities, such as the Galiyat
Development Authority (GDA), is extensive and covers the main tourist areas of KP, a thorough
assessment of their performance, capacity and capability of using locally generated revenues for
infrastructure development and service delivery needs to be undertaken. This could be an area of
further research work.
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