The Association of Hotels and Touristic Enterprises of the Algarve (AHETA) today appealed "to the common sense of local authorities to resist the temptation to solve their serious financial problems through a race to increase and create new municipal taxes and fees".
AHETA stresses that “the loss of competitiveness of the tourism economy is the direct consequence, among other factors, of high taxation compared to our competitors, namely municipal fees and taxes”.
And he emphasizes that "the unrestrained and somewhat uncontrolled growth that has been seen in recent times of these rates and taxes has further aggravated the competitiveness of regional tourism, creating additional difficulties for our companies."
The Algarve's hoteliers explain that in this case are water fees and meter rental, collection of urban solid waste, sanitation, spills, security fees, tourist fees, availability fees, municipal property tax (IMI) and many others.
And they warn that “the current elasticity of demand does not allow the increase of these rates to be transferred to the tourist/consumer”, so they are “supported by the companies”, already weakened.
“The economic activity of the region cannot continue, eternally, to bear the costs of a model conceived and implemented to manage periods of abundance, urgently needing deep reforms, including financial sanitation measures and others”, defends AHETA.
The hoteliers association also emphasizes that “increasing taxes may be the quickest and easiest solution to solve local authorities' short-term problems, but it is also the one that most compromises the future. The Algarve's hotels and tourist developments cannot be the solution to all the financial ills of the Algarve's municipalities, nor are they in a position to continue to accommodate further cost increases».
On the other hand, AHETA reiterates once again the need for municipalities to "harmonize many of these fees and taxes, given the diversity of prices charged from municipality to municipality, in order to avoid situations of unfair competition between companies in the same industry and the operate in the same markets'.
In addition to the increases in all municipal fees and taxes mandatory for Councils that use the Local Economy Support Program (PAEL), the credit line that the Government created to support municipalities in difficulties, several municipalities have announced increases or creation of new rates.
This is the case of Vila Real de Santo António City Council, which decided to establish a tourist tax, with an average value of 1 euro per overnight stay, whose revenue is intended, according to the municipality, to contribute to the maintenance of the Sports Complex.
Thus, from the end of the summer onwards, all accommodation units in the municipality will be obliged to bill the customer for an additional item, exempt from VAT, and designated as the Vila Real de Santo António Tourist Tax.
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