Tax Reduction in Tourism Sector and Its Economic Effects: A Social Accounting Matrix Approach

As a result of globalization, increases in household incomes and technological improvements on transportation vehicles cause the efficient assestment of leisure time which accepted normal goods in economics and this situation evokes to increase desires of humans for travelling, exploring places and leisure and led to develop tourism movements in the world consistenly almost every year. With the impacts of the implementation of liberalization policies in the early 1980s, Turkish tourism industry accelerated growth. Another important factor is Tourism Encouragement Law issued in 1982. This study aims to investigate a tax reduction in tourism industry of Turkey and its economy wide effects. In this modelling scope, Social Accounting Matrix constructed by using the same year’s input output matrix, which was modified to set an explicit tourism industry from by using the information which gathered under tourism satellite accounts of the same year