Saturday, October 17, 2015

Making Things Up On The Hoof: Tourist tax

And so, the moment when the tourist tax becomes a reality draws closer. They made it all that much more official by having a press conference at presidential HQ. The president, the tourism minister, the finance minister. It was just like old times when Antich, Alomar and Mesquida announced the eco-tax. One can almost look back on that with some fondness; at least they knew what they intended spending the money on, even if it wasn't all wisely spent and a great deal of it was never actually collected.

I admit to not being totally opposed to the tax, the justification being that I believe there are moral grounds for a tax to contribute to resources and services, just like the resident population. But even this justification is lessened by, for example, the fact of the tax on petrol that supposedly goes to the health service. Not all tourists pay this of course, but a good number do, and one wonders where mention of it is in the government's budget for 2016. Conveniently filed somewhere under "other" or "special" taxes.

Though not totally opposed, I found myself increasingly angered by the announcement and the explanations, in particular the contradictory statements. Armengol mentioned the use of the tax for tourism promotion, then Barceló said that it would primarily be for environmental conservation and heritage preservation before unveiling a wish list of other applications. Tourism infrastructure, products for tackling seasonality, technological innovation for economic diversification and for tourism, improving training. As I've noted before, if they must have a tax, then don't go spreading it so thin that it ends up being of little benefit.

The overriding impression, though, is of a government that doesn't know what it's doing, making things up on the hoof, bowing to requests from whomever it last spoke to. And it is all couched in the incessant drivel about dialogue and consensus. How can there be when so many are opposed, including the "citizens" who must now pay up to two euros a night if they fancy a weekend break?

Because they don't know - definitively - how it will be spent, there is to be a joint commission, and this will doubtless strive for dialogue and consensus. Until it and members of the government can give the final version, we will be fed the sort of nonsense and spin that we are at present.

Barceló has revised downwards his percentage cost of the tax: there's an upper limit of 1.4% now and not the 1.7% there had been. The spin as to the cost doesn't, it has to be said, make the tax sound so bad. Nine days in a four-star for a family of four in summer will cost 25 euros, says Barceló. One presumes, therefore, that the daily rate for a four-star per adult will be 1.38 recurring euros, which would be an odd amount. Or perhaps by nine days, he means eight nights, in which case the rate would be 1.5625 euros, assuming the family of four comprises two adults and two kids under the age of 14.

It might not prove to be that onerous, though nothing is being said as yet about the maximum number of nights for which it will be charged. This is just one of the uncertainties to add to those of what it will actually be used for, how exactly it will be collected, how the government might propose getting those in "unregulated" accommodation to pay. Then there are others. What about foreign property owners who are non-residents? Ones who come for, say, three months. There will presumably be a limit for them, won't there be? In fact, why should they pay at all, as they already do in different ways? Any charge would be mightily unjust, though how it might be collected, assuming the government cannot do so at the airport, would probably exclude this group of "tourists".

But have the government even considered them? Just as, have they considered yachts that come and moor for a "stay" in the same way (in fact longer) than cruise ships, for which a charge based on a minimum six hours in port (which seems likely) seems dubiously justifiable.

Then hat about villas? Will they all attract the two-euro rate? Or will there be a differentiation? And if so based on what criteria? Here is a further example of the government flailing around and making announcements that are anything but complete, thus giving rise to speculation and potential loss of tourist business.

Reaction from various business sectors is differing. Though the hoteliers are hostile and are saying that it is a "bad measure at a good time economically", they want to be involved in the dialogue and the consensus. Business comments cannot be too strident or they might find they are not listened to when it comes to seeking this consensus. It is noticeable, though, that those associations which are more positive than others seem wedded to the idea that the tax should be directed towards the environment, and ultimately, one feels, this is where the battle will be fought. The war, in a sense, is lost in that the government is determined to go ahead with the tax, but the battle as to it use most certainly isn't over, and lurking in the background is an element that may make this battle intense. The most strident talk politically, apart from the opposition of the Partido Popular, is that of Podemos.

Its leader, Alberto Jarabo, has described the hoteliers as the "ventriloquists in the shadows", the ones who were commanding tourism policy of the PP. Of the tax he has said that Podemos will not accept a tax that might benefit the hotel sector. He wants all the revenue to go to the environment and to reducing the tax burden of "the citizens". Barceló, caught between every conceivable stool, says that the tax will go primarily on environmental and heritage projects, while at the same time saying it will go elsewhere. He is acutely aware of the eco-element within his own party, the pressures from GOB, the environmentalists, and from Podemos. But when push comes to shove, if Podemos don't gain "consensus" as to how the tax will be spent, might they vote, as they already have on the senior appointments affair, against the government, thus potentially rendering the tax politically untenable?

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