Italy Scraps Tourist Tax Proposal

by Ulrika Lomas, Tax-News.com, Brussels

20 November 2006

A proposal to introduce a levy on tourists visiting Italy has been scrapped by the coalition government, much to the relief of the country's tourism industry.

The draft government budget for 2007 had originally contained a measure that would have allowed local authorities to put in place an EUR5 (US$6.40) charge per tourist per day to help them meet the growing costs of maintaining historic monuments.

However, the measure received widespread opposition from parties within the governing coalition, including from the Prime Minister's own governing centre-left party, which acknowledged the tourist industry's fears that the tax would deter people from spending holidays in Italy.

Culture and Tourism Minister Francesco Rutelli was reported as observing last week that dropping the proposal from the budget was a “wise decision".

"Italy needs to be competitive in the tourism sector and this charge would not have helped," he stated.

The government's decision was slammed by the association representing Italy's municipal authorities, which called the action "damaging and incomprehensible". They argued that many visitors, particularly day-trippers, spend little, while benefiting from publicly-funded services.

In a bid to appease the larger cities such as Rome and Florence, Rutelli told news agency ANSA that the government would study alternative measures to alleviate the cost burden on the most severely affected cities.

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