Kathmandu, Jan. 8: The entire national economy would not be able to bear the burden of the 10 per cent service charge demanded by hotel employees’ unions to be levied on hotel clients’ bills, a committee of different tourism related associations said here today.

“Bearing in mind the totality of the economy, the service charge will have adverse impacts,” said Prabhakar Shumsher Rana, Chairman of the committee. “For the service charge to be implemented, the tourism sector will have to show significant improvement which means the entire economy will have to show the required progress.”

Rana was speaking at an informal discussion with the press here today. The programme was organised by the 16 different tourism related organisations that have pooled together to form Industrial Relation Committee.

Dwelling on macro-level issues, Rana also said that the nation had to be clear on what kind of economy it intended to have. “This is the time we have to be clear about our economic policy,” he said highlighting the need to make the Labour Act more balanced – both for the labourers and the investors. “If we continue with the same provisions in the Act, the foreign investors who are already here will run away.”

Clarifying about the necessary changes on the Labour Act, Rajendra Khetan, Chairman of the Employer’s Council at the Federation of Nepalese Chambers of Commerce and Industries (FNCCI) said that there have to be the provisions of hire and fire, no work no pay, clear conception on who is the decision maker, bonus issues, among others.

“Since we are entering the World Trade Organisation in few years time, we have to be cautious about many things now,” he said. “In the last two weeks we could open our business for six days only,” Khetan said pointing at the dwindling productivity of the country.

Narendra Bajracharya, President of Hotel Association Nepal (HAN), said that the private sector expected the high level committee to consider the recommendations of the committee of the tourism-related associations.

The committee will very soon submit its recommendations to the high level committee, according to Bajracharya.

The discussion organised by the different tourism-related organisations comes at a time when the government-formed high level committee is still looking into the matter of the 10 per cent service charge issue.

The government last month formed the high level committee headed by National Planning Commission Vice Chairman Prithvi Raj Ligal in a bid to avert the potential crisis in the tourism industry. Both the hoteliers and their employees’ unions were adamant on their stands on the 10 per cent charge issue. While doing that, they were even ready to shut down the hotel services thus bringing the entire tourism industry to a grinding halt.

While the employees’ unions have been claiming that the 10 per cent charge issue is their right, hoteliers have been claiming that the charge would be an extra burden on tourists. The hotel employee’s unions have even claimed that the 10 per cent charge would make hoteliers’ accounting system more transparent.

The high level committee has the deadline to submit its recommendation on the service charge issue by February 11 next month. While hoteliers have made it clear that they would abide by the decision the government would make, the employees’ unions are still assertive that their demand should be fulfilled.