Tourism development zones – special economical zones with favorable conditions for tourism - can be created in Russia in the nearest future. Amendments to the law ‘On Special Economical Zones’ can be made by the State Duma in March – April 2006 followed by a tender.
Tourism development zones are believed to attract investors who according to the legal project are provided with incentives from the government - social tax exemption (14% instead of 28%), and a 5-year land and property tax break.
It is necessary to point out that the idea of tourism development zones creation is not new – it is a common practice in Spain, Greece, Turkey, Australia and the Republic of South Africa. Russian tour operating companies that specialize in incoming tourism divided opinions regarding the possible effect of the project realization. For example, General Director Deputy of Rosa Vetrov Travel Company, Elena Voevodina demonstrates enthusiasm towards such an initiative: ‘creation of tourism development zones in Moscow will stimulate construction of mini-hotels’.
However, General Director of Dolphin Travel Company, Sergey Romashkin, said that incentives provided upon the legal project will hardly attract investors: ‘VAT and income tax are the most significant for businesses while social tax, land tax and property tax are not important in terms of volume. Furthermore, investors in hotels have to pay VAT even during the construction stage.
Moreover, travel market experts doubt such regions as Krasnodar region do not need special economical status. Private investors, having realized the potential of the region as a tourism zone, already make massive investments into its development.
Tourism development zones are believed to attract investors who according to the legal project are provided with incentives from the government - social tax exemption (14% instead of 28%), and a 5-year land and property tax break.
It is necessary to point out that the idea of tourism development zones creation is not new – it is a common practice in Spain, Greece, Turkey, Australia and the Republic of South Africa. Russian tour operating companies that specialize in incoming tourism divided opinions regarding the possible effect of the project realization. For example, General Director Deputy of Rosa Vetrov Travel Company, Elena Voevodina demonstrates enthusiasm towards such an initiative: ‘creation of tourism development zones in Moscow will stimulate construction of mini-hotels’.
However, General Director of Dolphin Travel Company, Sergey Romashkin, said that incentives provided upon the legal project will hardly attract investors: ‘VAT and income tax are the most significant for businesses while social tax, land tax and property tax are not important in terms of volume. Furthermore, investors in hotels have to pay VAT even during the construction stage.
Moreover, travel market experts doubt such regions as Krasnodar region do not need special economical status. Private investors, having realized the potential of the region as a tourism zone, already make massive investments into its development.
