ISLAMABAD, April 16: The hotel industry has asked the government to abolish bed tax in the upcoming budget on the plea to promote establishment of hotel chains in the country.

The industry is already paying 15 per cent general sales tax (GST), which was too high, said the chairman of Pakistan Hotel Association (PHA), Muzzafar Baweja, in a statement on Monday.

The abolition of bed-tax should be made on an immediate basis as it was an unnecessary burden on the tourists without any appreciable benefit to the exchequer, which is imposed on the capacity assessment, and has remained a subject of legal controversy, as the hotels cannot hold their unsold rooms in inventory of finished goods, he said.

There is a strong need for focusing full attention to building more world class hotels in the country, which is only possible if problems of hotel industry are given due importance, he said.

The PHA said that the government should cooperate with the private sector stakeholders for promoting tourism in the country.

“The tourism policy is long been awaited and the industry should have been declared an A category industry,” which will also encourage new investment in this sector.”

The exemption of duties and sales tax was necessary as there were very few four and five star hotels of international standing in Pakistan and the economic activities have created a demand for new hotels, he said.