10 March 2020 — News
by Eelco van der Enden from NBA
Eelco van der Enden, Partner at PwC, describes his project to use blockchain and tourist tax to ensure the long-term sustainability of tourist destinations.
I was working in Suriname’s capital Paramaribo and was walking along the Amazon river one day. It was a splendid location, rich with natural beauty. But the river was full of bottles and plastics. To me, that was a tragedy, and I wondered why the local community wasn’t engaged in cleaning up the river.
And that got me thinking about the investment that is needed for local communities to properly protect and maintain their natural and cultural monuments. Being an accountant, my mind turned to taxes. A steady tax revenue could provide the resources needed to maintain these landmarks.
It was clear to me that the people causing the pollution and damage should be responsible for paying for its repair and upkeep. Most commonly, it is overuse by careless short-term visitors, i.e. tourists, that cause an inordinate amount of damage to a local environment. So that made me think of a tourist tax. But so many governments already levy such taxes and, even so, Venice is sinking. The money is clearly not getting where it needed to be.
So now I had identified who should pay the tax – tourists with the resources to afford it and who were responsible for a large majority of the damage – now I needed to find a way to track these taxes and make sure that they can be reinvested in the local economy.
Thanks to blockchain technology, tax revenue can be transparently earmarked for a specific purpose. In this way, the money collected by governments from tourists to a specific location can be reinvested to the local community for the upkeep of the landmark and other infrastructure around it.
Now I needed to see if this plan would stand up in the market. After some analysis, we were able to see that tourism is set to skyrocket. Even today, 1 in 9 jobs are related to tourism and an estimated 20% of the global population will soon be traveling for leisure. It’s a growth market. So it’s clear: tourism is ‘still a thing’.
Young people especially are concerned with sustainability in their daily lives and so the introduction of a tax that would allow them to give back to the places that they are visiting aligns with their morality and worldview. We are also working on ways in which visitors can be notified on the impact their taxes are having, to complete the circle.
Some people said to me, “What about the people that will not visit because of this tax?”, to which I would reply: “they are probably not the tourists that would respect your country.” I believe that you need a positive outlook and to hope that people want to improve our planet and leave it better than they found it.
Over the past years, I have been laying the groundwork for this project, and I believe it could make a difference to small communities and major tourist destinations alike.
If you want to learn more, please watch our intro video below.
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