Making A Virtue Out Of A Tourist Tax

When Catalonia originally drafted provisions for its tourist tax, the tariffs were higher than those which were eventually implemented. The government had initially spoken of revenues in the region of 100 million euros per annum being raised. This was before tariffs were scaled back. It accepted arguments that rates were too high and too universal. Down came the rates and down also came the number of nights for which it would be applied - to a maximum of seven. In addition, out went any charge for under-16s. The total revenues raised in 2013 and 2014 were, therefore, significantly lower than had initially been envisaged: 38.5 million and 41 million, respectively.

Catalonia's volume of annual tourism is roughly 50% greater than the Balearics. Despite this lower volume, some numbers that have been mentioned regarding a new Balearic tax bear similarity to that which was tossed around with the old eco-tax - approximately 80 million euros a year. On this basis, the Balearic tax would need to be at least double that of Catalonia's; more in fact because of the different volumes.

Catalonia's tax caused some discussion but it was never that fierce. Perhaps this was because the government took the view that more modest rates were appropriate and sufficient. Whatever the reason, Catalonia never lost the PR battle because a PR battle never really ensued. And now, despite the tax, tourism performance has improved. More visitors go to Catalonia than ever before. The tax has had no discernible negative impact.

A point I have made previously regarding a Balearic tax is that it involves Mallorca. Well, obviously it does, but Mallorca is a magnet for international media - both wishing to praise and condemn - in a way that Catalonia is not. The Costa Brava was every bit at the front of the mass tourism movement as Mallorca was, it is still every bit as attractive to visitors from the prime markets of the UK and Germany as it was, yet it does not inspire the same interest. Mallorca is Mallorca: in turn, a jewel and victim of its own success where the media is concerned. If Mallorca has a tax, it will be pounced on, slated, ripped apart amidst insinuations of rip-off. And if it is a tax at a higher rate than Catalonia's, which it would have to be in order to achieve the revenue targets that have been mentioned, it would be compared with Catalonia's in order to reinforce the rip-off point: Mallorca is just plain greedy.

In principle I am not against a tourist tax, so long as it is clear why there might be one. Catalonia was always clear why it wanted one - it is a commercial tax, a scheme designed, in essence, to extract money from tourists who pay for Catalonia to try and attract more tourists. This justification is a reason why I do find it surprising that there hasn't been more of a furore. Why should tourists fund tourism promotion? I can think of no moral reason why they should. But where does morality come into the equation either in Catalonia or elsewhere? The strength of an argument that Mallorca would suffer competitively is lessened by the fact that competitors have taxes: Catalonia is one; France, Bulgaria and Croatia are others; Turkey has its tourist visa; various cities across Europe have taxes; Greece will up its accommodation VAT rate significantly, a tourist tax by another name.

Just because other destinations have a tax isn't a justification for Mallorca. Yet this is how it might appear. PSOE have linked the issue of the tax to a redefinition of financing from Madrid, a process that will not fundamentally alter unless there is a change of government. However, there is already an indication that the PP government has agreed to up direct investment funding significantly (a separate issue to the financing through tax redistribution): it would be in the order of what a tourist tax might actually raise. If this comes about, a tourist tax might then take on a punitive appearance.

If there is to be a tourist tax, it should be symbolic as much as fiscal, a means of tourist involvement, a means not of lessening tourist loyalty but of strengthening it. A tax should be a statement of tourist appreciation of what Mallorca offers. It should not be onerous, certainly no higher than Catalonia's, but it should be "sold" through a grand campaign to explain its purpose. In this, I am inclined to agree with the environmentalists GOB that it should be reserved for the environment, as emotionally this is an easier sell than, say, tourism promotion. Harness social media, flood hotels, airports and ports with publicity, invite tourist suggestions as to use, make tourists part of the tax process not simply contributors. Allow them to be participants. The "new politics" is all about participation, so why not extend this to the island's visitors?