Sunseekers Could Shun Balearics Over Tourist Tax

by Lisa Ugur, Tax-news.com, London

11 April 2001

A controversial tourist tax that will sting travellers to Spain's Balearic islands was all set to be approved in parliament yesterday, much to the consternation of hoteliers and the Balearic tourist boards, who have been fighting to prevent the implementation of the tax, which will cost vistors an average one Euro per day (about 160 pesetas).

Political, social and commercial factions have been slugging it out in talks over the tax, which is aimed at raising about £40m annually to help Majorca, Menorca and Ibiza fight environmental problems which are exacerbated by the incessant flood of tourists. Whilst the tax only amounts to about 62 pence per day, a family of four on a two week break can expect to part with approximately £35 in total.

Hotel owners fear the tax will persuade holidaymakers to go elsewhere and legal action against the government from the combined force of the Balearic hotel sector is a real possibility, now that the hotel sector has announced it intends to ask the central administration in Madrid to appeal against the tax. Hoteliers feel they have been "cheated" by the local government, and in the last few days President of the Majorcan Hotel Federation, Pedro Cañellas, and representatives from the tourism industry, have expressed their "unanimous rejection" of the "unfair" tax.

The Majorcan Tourist Board has also slammed the impending tax. President of the Tourist Board, Miguel Vicens, who has spoken out against the tax regularly in the past, was quoted in local publication the Majorca Daily Bulletin as saying: 'We said right at the start and we repeat, we don't like the tourist tax and this is the message we will be intending to get across over the next few days in the build up to the tax's approval in parliament.' Vicens said that the entire tourist industry, from tour operators to travel agents, oppose the tax and that it will hit the industry hard if introduced.

Balearic leader Francesc Antich has admitted that efforts to reach agreement with hoteliers over the tourist tax have categorically failed. Antich said that he and other representatives of the government had held several meetings with Pedro Cañellas, president of the Hotel Federation, and other hoteliers, but nothing had been achieved. Some hoteliers have criticised Antich, claiming that they have been deceived over the tourist tax, but he has defended himself, saying last week: 'All these stories - which come from the Popular Party and some hoteliers because I do not believe that the president of the Hotel Federation would say such things - are, I think, a desire to increase tension between the Balearic government and the sector.'

It looks, however, like the tourist tax is a fait accompli. Jason Moore, editor of the Majorca Daily Bulletin, told a UK tabloid newspaper this week: 'The tourist trade is aghast. A long legal battle is on the cards. But parliament hopes to start levying the tax by the summer.' That's bad news for the nine million or so annual visitors to the Balearics, a third of whom come from the UK.

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