Wednesday, April 19, 2017

The Non-Ecotax

While I've been away - which I haven't been as I've been chained to a desk for the purposes of a book in the manner that rowers of ships across the Mediterranean were once shackled in ancient times - we had this business of the tourist tax not being an environmental tax. Quelle surprise, as they don't say here.

The admission by the government that the tax is for general revenue-raising purposes was made in a submission to the Balearic High Court; it is considering the legality of the tax because of the appeal by the Mallorca Hoteliers Federation for judicial review. Strangely enough, this fessing up seemed to pass without a great deal of comment: in the established media, if not on social media.

The point with the tax is that of course it is for general revenue purposes. It can't be anything else. It is itemised in the government's budget as a revenue; the same government which bangs on endlessly about the insufficient level of financing from Madrid. The government has the power to establish specific taxes if it needs to improve its income. The tourist tax is one means of doing so. Therefore, it is a general tax.

The difference lies with the revenue raised being ring-fenced for the various purposes that the law on the sustainable tourism tax set out. In this sense, it isn't a general tax, but the goalpost-shifting which has occurred (or did with last year's revenue) has meant that the revenue has leapt over the fence. It has gone on water, the provision of which is a fundamental demand made of any government. Industry relies on water. The citizens' health and sanitation are at risk without water. And so are the citizens' swimming pools.

I maintained, well before the brain fade brainchild notion of a tax was ever mooted, that if there is to be a tourist tax, then it should be used for resources - water being a key one. In this regard, the diversion of funds to water projects seemed fair. However, I am with both GOB and Podemos in believing that such projects were not among the purposes.

There again, one can make the case for pretty much anything being purposeful in terms of "sustainable tourism". Investment, for example, in renewable energies through the tourist tax would be equally justifiable. Tourists need energy, as they also need water. There could be investment in boosting subsidies for seasonal accommodation for doctors and police. Tourists need doctors and police, who currently realise that they can't afford accommodation in the Balearics, if indeed they can find any. But these "purposes" would be tangential, as is the case with the water projects, to what the tax is intended for.

The government made a rod for its own back by insisting that there be the range of purposes that there are. Flexible is how one might describe them. Or, as I have previously defined it, a camel of a tax, the use of which is determined by a camel of a committee (all 32 of them). The environmental purpose is in fact only one. The government is therefore right in saying that the tax is not environmental. It's only partially so.

At least with the old and unlamented ecotax the then government provided none of the current fuzziness. So dedicated was the ecotax to the environment that the government, among other things, handed over some 14 million euros in acquiring - in the name of the citizens (and presumably also tourists) - the Son Real finca. And the different governments have been regretting it ever since, if the general mismanagement of the finca is any gauge of post-acquisition governmental interest.

A further point to make is that Catalina Cladera, whose sole interest as finance minister is to have as much disposable tax revenue as she can lay her hands on, said in advance of the tax's introduction last year that it wasn't an ecotax. In stating this, she was not wishing the tax to carry the stigma of the old ecotax but she was also being accurate. In fact, the environmental purpose for which the tax is supposed to be used was boosted from the original draft of the legislation. That was because the government bowed to the pressures of GOB and the more fervent econationalists within its own ranks, i.e. David Abril of Més.

Still, does any of this make much difference to those who pay the tax? Most tourists won't have any idea what the purposes are. The assumption will be that it is a tax like other taxes, therefore one for general revenue. And the government, in the form of the tourism director-general Pilar Carbonell, says there have only been four complaints. What does she expect? Are there forms on hotel reception desks for registering complaints, especially about revenue not being used for the environment?

No comments: