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TOURISM TAXES AND NEGATIVE EXTERNALITIES IN TOURISM IN AUSTRALIA: A CGE APPROACH

Ranjith Ihalanayake

DOI: 10.22495/cocv10i4c1art4

Abstract

In this paper we analyse general equilibrium effects of an increase in a tourism tax which we hypothetically designed to internalise negative externalities of international tourism in Australia. Several simulations were carried out using a computable general equilibrium (CGE) model of the Australian economy. The simulations were carried out assuming two different economic environments, the short-run and the long-run. The simulation results suggest that due to an increase in tourism taxes, the international tourism sector tends to contract while the other sectors expand. Overall, an increase in tourism taxes appears to be welfare improving in the long-run though it generates a marginal contraction in overall economic activities in the short run.

Keywords: Tourism Taxation, Negative externalities, CGE, Australian Tourism

How to cite this paper: Ihalanayake, R. (2013). Tourism taxes and negative externalities in tourism in australia: A CGE approach. Corporate Ownership & Control, 10(4-1), 200-214. http://doi.org/10.22495/cocv10i4c1art4

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